1951-03-06

[Stage Direction]
Mr. L. O. Breilhaupt (Waterloo North)
presented the first report of the standing committee on railways, canals and telegraph lines, and moved that the report be concurred in.
Motion agreed to.


Mr. Speaker:: I have the honour to inform the house that I have received a message from His Excellency the Governor General, signed by his own hand, reading as follows: Government House, Ottawa, 5th March, 1951
Members of the House of Commons:
I have received with great pleasure the address that you have voted in reply to my speech at the opening of parliament. I thank you sincerely for this address.
Alexander of Tunis



BRITISH NORTH AMERICA ACT


Right Hon. L. S. St. Laurent (Prime Minister):: I beg leave to table further correspondence between the Minister of Justice and the premiers of several of the provinces in connection with the suggestions for constitutional amendments. This correspondence extends from January 26 last to March 2. The correspondence is tabled in the language in which it was received. The translation in French is being prepared and checked.


Mr. Knowles:: Could it be printed in
Hansard as an appendix, as was the previous correspondence concerning the same question?


Mr. Si. Laurent:: If it is the desire of hon. members to have it printed as an appendix to Hansard, that could be done.


Mr. Speaker:: Is it the pleasure of the house that the correspondence referred to be printed as an appendix to Hansard?


Some hon. Members:: Agreed.
(For text of correspondence, see appendix, pages 990 to 994.)



CIVIL SERVICE


Hon. Douglas Abbott (Minister of Finance):: Mr. Speaker, the Prime Minister (Mr. St. Laurent) has asked me to deal with the inquiry of the hon. member for Winnipeg North Centre (Mr. Knowles) on February 19 regarding the pattern of lay-offs of civil servants that is taking place as part of the government's economy program.
I should first make clear that so far as possible the government is endeavouring to avoid the hiring of new employees as a means of getting to the lower levels that are planned, instead of laying off present employees. Programs of expansion already approved are being revised to reduce or eliminate the additional demands on the labour market which they would have involved. Where employees are to be released from some work for reasons of economy, they are being transferred where possible to fill vacancies elsewhere, either vacancies arising from normal turn-over, which is substantial in times like the present, or vacancies in units where some expansion is required because of the defence program and its various effects. This transfer is being arranged by the individual departments concerned', and, of course, by the civil service commission.
It is not possible, however, to achieve all the necessary reductions in staff by this means, and consequently some employees are being released. Most of these are what are termed "temporary" employees and have been employed by the government for relatively short periods. The actual proportions differ in different departments and units, and I cannot generalize. Nor can I give total figures at this stage, as the economy programs in many departments are still being worked out and it is too early to say how many will be released, or of what categories and to what extent they can be transferred to other units.
Speaking in broad terms, however, it is possible to say that most but not all the employees released will be from temporary positions. Some persons occupying so-called permanent positions are being released as part of the general program. Some of these will be at or close to retirement age and will thus be retired earlier than would otherwise have been the case. Obviously, however, earlier retirement does not help to make more labour available for the defence program, unless

Civil Service
those going on pension can be expected to take work with other employers, or unless the person being retired earlier than otherwise was holding back the pace of work by others, which may occasionally be the case. Other permanent employees being released may, of course, be entitled to certain benefits, either immediate or deferred, under the superannuation act, depending upon the circumstances of individual cases. Other things being equal, permanent employees are less likely to be laid off than temporary ones, and those with long service less likely than those with short service. Departments have been asked to give particular care to the cases of older employees, whether temporary or permanent, who seem unlikely to be able to find other work.
A number of departments and the national employment service are making arrangements to assist civil servants being laid off to find employment elsewhere. That is, of course, wholly desirable, not only for the help it affords to the individual, but also because it assists in meeting the other demands for labour.
The estimates to be brought down shortly will reflect the plans for reductions in staff and will provide suitable opportunities for discussions regarding individual departments or smaller units of the public service.


Stanley Howard Knowles: May I ask a supplementary question? Are there any cases in which permanent employees are being laid off ahead of temporary employees, where both are working in the same branch of the service?


Douglas Charles Abbott: I could not say. It may be that there are such cases, but I am not aware of them. As I indicated in my statement, circumstances will vary in the different departments, and the primary responsibility for the pattern of lay-offs in the department must, of course, rest with the permanent head of the department.


Stanley Howard Knowles: Then such may be the case?


Douglas Charles Abbott: It is quite possible.


Mr. Fleming:: May I ask the minister what the government's objective is in connection with the reduction program?


Douglas Charles Abbott: Speaking from memory, I think the Prime Minister announced that we hoped to achieve a reduction of between 5,000 and 6,000 positions from those provided in the estimates for the year now terminating; and that for the coming year-that is, the year which will commence on April 1- provision would be made for between 5,000 and 6,000 fewer positions than were provided for in the estimates last year.
IMr. Abbott.]


Mr. Harkness:: Do persons enjoying the veterans preference for employment, or disability pensioners enjoying that preference, have any advantage over other civil servants in the matter of not losing their positions?


Douglas Charles Abbott: Unquestionably the veterans preference applies in taking people into the service; and clearly department heads, in considering lay-offs, would take into account the fact that a man had that preference.


Mr. Pearkes:: Some veterans are being laid off.


Douglas Scott Harkness: Yes, they are being laid off.


Douglas Charles Abbott: Of course they are.



POSTAL SERVICE


Hon. Edouard Rinfret (Postmaster General):: Mr. Speaker, there already have been several references in discussion in the house to the curtailment in letter carrier delivery on residential walks now being applied throughout the country.
From the nature of these references, and also the many inquiries I have received from others outside the house, it would appear to me desirable that I make a statement clarifying what is being done, and the effect on patron and employee alike.
First, however, may I emphasize that, as I have already stated, the reduction in service from two deliveries a day to one is an economy measure, which with other adjustments being made throughout the department and service as a whole will mean an over-all saving of approximately $3,500,000. I am sure it will be agreed that this will be a substantial contribution on the part of the post office to the objective we all have in mind, namely, the reduction of the ordinary costs of government to the minimum.
In discussing this question, I will deal with it first from the standpoint of service to the public, and second from the standpoint of its effect on our employees, particularly the letter carriers.
There are three classes of walks in letter carrier delivery. The first is the residential walk, where there is less than twenty-five per cent of business calls. It is this type of walk that is primarily affected by the cut in service. It will in future receive one delivery a day, where for the past several years it has had two.
Unfortunately, as you will already have noted, some business firms are located on

these walks. These will now get only one delivery which will be as early in the day as can be arranged. In the smaller cities, where the business sections have not in the past been segregated into mixed or business walks, which I shall presently describe, a complete resurvey is being made to have this done as far as it is practicable to do so.
Where this condition applies in the larger cities, it has not been possible to make this resurvey in the time available before the change becomes effective, March 31. Further, it can only be done gradually, because of the tremendous task involved and the effect of the necessary innumerable changes on internal operations.
It will, of course, be understood that there will be business calls in residential areas where the number of calls does not meet the minimum departmental requirements and where restriction to one delivery a day cannot be avoided. For these, every effort will be made to provide necessary service where the volume of mail warrants, either through post office lock boxes or through general delivery at the post office.
I must again emphasize that up to the moment I have been dealing with residential walks, which have been reduced from two deliveries a day to one.
The second class of walk is the mixed walk. These have from twenty-five to fifty per cent of business calls, and under the new arrangement they will be carefully resurveyed. In cases where a third delivery is given at present, there will be a reduction to two deliveries wherever it can reasonably be done and a saving of manpower realized.
The third class of walk is the business walk, where over fifty per cent of the calls are recognized as business calls. These will have two deliveries a day or more, the number above two depending on the results of surveys which will be made to determine the actual need.
Obviously a drastic change of this kind cannot be made without serious repercussions upon our letter carrier staff from two points of view, the first being the work week of the reorganized staff, and the second the situation of surplus personnel, which is expected to total about 1,200 letter carriers.
Letter carrier walks have, heretofore, been organized on a forty-four hour week-five days of eight hours and four hours on Saturday. In attempting to arrive at a new work week, the question of Saturday presented a particular difficulty, because it was obvious there would have to be work done in the afternoon if the longer walks were to be covered. Various suggestions were made, and studied,
Postal Service
as to ways in which this situation might be met. A plan was finally evolved which was favourably received by the letter carriers generally.
This arrangement provides the equivalent of a forty-four hour week, arrived at as follows: The men will work an eight-hour day, six days a week, with a week off after every eleven weeks of duty. One of the benefits of this plan is that it gives a number of men time off during the preferred seasons of the year, which they ordinarily would not be entitled to from an annual leave standpoint because of their length of service. It also means that the relief required every eleven weeks would be performed by regular letter carriers.
Reorganization of the walks has therefore proceeded on this basis. It was felt it would not be unreasonable, with the extension of the work week, to require a letter carrier to serve one complete walk and half of another walk once per day instead of covering one walk twice per day. This naturally would realize a saving of one in every three letter carriers on walks classified as residential. It would also mean a ratio reduction in the relief staffs maintained to protect casual, sick and annual leave.
I think it can be taken for granted that it is not the intention of the department heartlessly to throw these men into the street. Every effort is being made to take care of the surplus employees within the postal service so as to keep the number to be released to the lowest possible minimum.
In the first place, the filling of vacancies occasioned by men going on pension in the postal clerk and mail porter classes from outside the service has been stopped to permit the absorption of letter carriers where possible.
Second, there will be an acceleration of our normal practice of releasing unsatisfactory and unqualified employees.
Third, lists of surplus letter carriers are being submitted to the civil service commission for consideration in assignment to other government departments where possible.
Despite our efforts to find positions for surplus letter carriers, it must be realized that while it is most regrettable, some letter carriers will have to be released, starting with the most junior men. When vacancies occur on the letter carrier staff in the future, these released employees will be given the first opportunity to return to the postal service.
There is a further possible temporary effect of the change-over to which I have not yet referred, and which I would like to discuss briefly in closing. Letter carrier delivery

Postal Service
in its country-wide ramifications is a very complex operation, particularly in the distribution system behind it. A change of the magnitude of the present one cannot be made almost overnight without a certain amount of dislocation, as regards both service to the patron, and the work of the employees. In both respects we ask patience and understanding co-operation. Our officials are doing their utmost to effect the transition smoothly and to foresee difficulties. They cannot be miracle-workers and please everybody at once. But given a little time, the new arrangements should soon be working smoothly and in the meantime every effort will be made to keep dislocation at a minimum. The full co-operation of our workers and the public will be a great help in achieving this.


Donald Methuen Fleming: May I ask the Postmaster General, in connection with the very timely statement that he has read, to give assurance that discretion and latitude will be allowed to the local postmasters in working out this policy in the areas in which they are responsible, rather than that rigidity should be imposed from Ottawa.


Édouard-Gabriel Rinfret: As I said in my answer to the question asked by the hon. member for Peterborough West (Mr. Fraser) the other day, we have asked for a survey from each of our postmasters, and we shall be guided by the answers that we get from that survey. Unfortunately, we have not all the answers. If the postmasters in a given city can give us the equivalent of what we are seeking generally throughout the country, we shall have no objection to applying it.


Mr. Graydon:: May I ask a supplementary question? Will the survey which the Post Office Department is contemplating be extended to cover some of the heavily populated suburban districts, and also the rural mail carriers, who are working now under disgracefully low financial arrangements?


Édouard-Gabriel Rinfret: The survey to which I have referred, and which has been under way for quite some time, covers the question of two deliveries or one delivery a day.


Gordon Graydon: It ought to be enlarged.


Mr. Fraser:: May I ask a further question? Will a mail carrier be allowed to accumulate his weeks' holidays and put them together and take a month at a time?


Édouard-Gabriel Rinfret: No, I am afraid not, because that would mean dislocation of the whole system.


Mr. Noseworthy:: Has the Post Office
Department an annual deficit on the delivery of magazines at the present postal rate? If so, what is that deficit?


Mr. Speaker:: Order. I do not think I should allow that question at this time.


Stanley Howard Knowles: May I ask a question with respect to one of the points made by the Postmaster General? Who will determine what mail carriers are to be let out on the ground that their service is not satisfactory?


Édouard-Gabriel Rinfret: I think I said in my statement that we would start with the most junior members.


Stanley Howard Knowles: But there was another part of the statement in which the Postmaster General said-


Some hon. Members:: Order.


Édouard-Gabriel Rinfret: Read the statement, and we will discuss it later.


Mr. Pouliot:: I thank the minister for his complete information.



PRIVATE BILLS


[Stage Direction]
Bill No. 119, for the relief of Antonio Romeo.-Mr. Winkler.
Bill No. 120, for the relief of James Edward Thomas.-Mr. Winkler.
Bill No. 121, for the relief of Mary Louise Webster Hunt.-Mr. Winkler.
Bill No. 122, for the relief of Marie Blanche Amilda Lessard Duplessis.-Mr. Winkler.
Bill No. 123, for the relief of Anne Fineman Segal.-Mr. Winkler.
Bill No. 124, for the relief of Ida Weinstein Yaphe.-Mr. Weir.
Bill No. 125, for the relief of Shirley Title-man Rodin.-Mr. Winkler.
Bill No. 126, for the relief of Yvette Ernestine Gagnon Lyons.-Mr. Winkler.
Bill No. 127, for the relief of Rose Pakidailo Greenberg.-Mr. Winkler.
Bill No. 128, for the relief of Marie Jeanne Dragon Bigaouette.-Mr. Winkler.
Bill No. 129, for the relief of Olive Marguerite Cann Nichol.-Mr. Winkler.


Mr. R. R. Knight (Saskatoon):: Mr. Speaker,
I ask leave, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles), to move the adjournment of the house under standing order 31 for the purpose of discussing a definite matter of urgent public importance, namely, the announcement in yesterday's press concerning the rise in the cost of living index to an all-time high of 175-2, and the need for the immediate establishment of price controls to stem any further rise in the cost of living.


Mr. Speaker:: The hon. member for Saskatoon has given me notice of this motion.
I might say that yesterday the hon. member for Rosetown-Biggar (Mr. Coldwell) also gave me notice of his motion. I wish to thank the members for doing this. It is in accordance with a custom which is being firmly established in the house.
With regard to the motion now before the house, it suggests adjourning the house in order to discuss the rise in the cost of living index to an all-time high, and also the need for the immediate establishment of price controls to prevent a further rise.
Standing order 31 reads in part as follows:
The right to move the adjournment of the house for the above purpose is subject to the following restrictions-
Then follow a number of restrictions, paragraph (c) being as follows:
The motion must not revive discussion on a matter which has been discussed in the same session.
When the house was considering the speech from the throne, an amendment was moved by the leader of the opposition (Mr. Drew), to which a subamendment was moved by the hon. member for Kootenay West (Mr. Herridge) and seconded by the hon member for Saskatoon (Mr. Knight), who now moves the present motion. That amendment to the amendment sought to add certain words to the third paragraph of the amendment offered by the leader of the opposition. The amendment stated:
We regret that Your Excellency's advisers have failed . . .
(3) To take effective measures to combat inflation and the rapidly rising cost of living.
The subamendment offered by the hon. member for Kootenay West sought to add to paragraph 3 of the amendment the following words:
Such as the immediate reimposition of price controls, and the payment of subsidies where necessary, so as to protect the health and- living standards of die Canadian people.
The motion now before us is to adjourn the house to discuss the immediate establishment of price controls. As I have read from standing order 31, the right to move the adjournment is subject to this restriction, among others:
The motion must not revive discussion on a matter which has been discussed in the same session.


Mr. Coldwell:: Before you rule, Mr. Speaker-


An hon. Member:: Sit down.


Mr. Speaker:: Under standing order 31
(6) (c) I am doubtful if the motion is in order. However I will not make a ruling on
Cost of Living
the basis of the point of order. Therefore I do not think it is necessary to have discussion on the point of order.
There is the question of urgency. The motion is to adjourn the house for the purpose of discussing a matter of urgent public importance. I would refer hon. members to Beauchesne's third edition, paragraph 174, where it is set forth that:
"Urgency" within this rule does not apply to the matter itself, but it means "urgency of debate," when the ordinary opportunities provided by the rules of the house do not permit the subject to be brought on early enough . . .
I must decide whether the rules of the house do or do not permit this subject to be brought on early enough. If hon. members will look at yesterday's Hansard they will find at page 942, under the heading "Business of the House", that the Minister of Public Works (Mr. Fournier) said:
Tomorrow we will move third reading of Bill No. 24, to confer certain emergency powers upon the governor in council.
That is the first matter which will come before the house today. Yesterday, as reported at page 907 of Hansard, the Prime Minister (Mr. St. Laurent) said:
If there is to be any system of controls of a substantial extent, controls over any wide field, that would have to be done by virtue of regulations or orders made under the Emergency Powers Act.
According to the statement made last night by the Minister of Public Works, the Emergency Powers Act will be the first matter to be considered by the house today. Therefore there will be every opportunity, I should think, within the rules and within the scope of that bill, to discuss the matter on which the hon. member for Saskatoon has moved the adjournment of the house.
Under these circumstances I do not think I should allow the motion to stand.



AGRICULTURAL PRODUCTS


[Stage Direction]
On the orders of the day:
Mr. J. A. Charlton (Brant-Wentworth):: Mr. Speaker, in view of the announced policy of the government by the Prime Minister to subsidize wheat producers for losses incurred under the wheat agreement, has the government given consideration to the position of the eastern wheat growers, cheese producers, hog producers and apple growers whose products were sold below world prices under government contract to the United Kingdom?


Louis Stephen St-Laurent: Mr. Speaker, the answer is no.
948	HOUSE OF
Inquiries of the Ministry Mr. Charllon: In view of the short answer given by the Prime Minister to my question, may I ask, if the government has not already considered the matter, whether it is prepared to do so now?


Jean-Paul Stephen St-Laurent: We are always prepared to consider anything, but that does not mean that the results of the consideration would be something that would comply with the apparent hopes behind the hon. member's question.


Mr. Fulton:: I should like to ask a similar question on behalf of the apple growers of British Columbia whose orchards were wiped out in the winter of 1949-50, and who have made representations about it. In view of the question to which the hon. member for Brant-Wentworth (Mr. Charlton) has referred, namely the need for assistance to prairie farmers, will the government now authorize assistance to fruit growers in British Columbia, in accordance with the requests recently made?


Louis Stephen St-Laurent: Mr. Speaker, the request, as I understand it, was that compensation be paid because certain fruit trees had been destroyed by frost. The number was found not in any way to compare with the disasters that gave rise to assistance from the federal treasury, first of all in connection with the Fraser valley floods, then in connection with the Red river floods, and the two conflagrations at Rimouski and at Cabano. It was found that this could not, by any stretch of the imagination, be regarded as a disaster that it was not within the financial capacity of the province to look after.


Gordon Graydon: Cheese was not destroyed by frost.


Mr. Jones:: Did the government of British Columbia make representations in regard to the fruit growers, and if so, did they receive that answer?


Louis Stephen St-Laurent: I would have to look at the correspondence. I know that there were members of the British Columbia legislature who were concerned in the representations made, but without looking at the correspondence I would not like to make a positive answer that there was or was not a request from the British Columbia government. I shall do that and, at another sitting, answer the hon. member's question.


Owen Lewis Jones: Another question. In view of the fact that several orchards were completely wiped out, would the government consider making loans at a low rate of interest to these fruit growers?


Louis Stephen St-Laurent: That would be a new policy that would have to be considered, [Mr. St. Laurent.J

because of its possible repercussions. I think such loans would qualify under the Farm Improvement Loans Act, but it would be at the rate provided in that act.



FISHERIES


[Stage Direction]
On the orders of the day:
Mr. G. F. Higgins (Si. John's East):: Mr. Speaker, I should like to ask a question of the Minister of Fisheries. What is the present position of the negotiations with the United Kingdom with respect to the sale of dried salt codfish to Europe for sterling and payment in dollars to the fishermen?


Hon. R. W. Mayhew (Minister of Fisheries):: The hon. member for St. John's East was good enough to give me notice of this question in sufficient time for consideration. I did make a statement in the house on February 22 to the effect that the problem referred to by the hon. member was currently under consideration. A fuller statement would not be advisable at this time.
An article dealing with this question appears in today's press and the headline gives a somewhat distorted impression. The movement to market of the 1950 production of salted codfish is proceeding satisfactorily. The current stock position in relation to forward sales would not indicate any likelihood of any carry-over of 1950 fish into the new marketing year. The stock position is, therefore, satisfactory when compared to a year ago. Already exporters are making preliminary arrangements for the movement of the 1951 production. Improvement in price, of course, will depend on supply and demand factors as they develop over the next twelve months.


Gordon Francis Higgins: Is it fair to ask the minister if, in the event of negotiations with the United Kingdom not being satisfactory, a payment will be made to the fishermen similar to the proposed payment to western farmers for wheat?



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Hon. Stuart S. Garson (Minister of Justice):: Mr. Speaker, I should like to refer to two questions which were asked yesterday by the hon. member for St. John's East (Mr. Higgins). The first question was:
Has there been an attempted sabotage of industrial production at Oshawa by communists?
In reply I would state that according to General Motors Company officials, as reported in the press, petty sabotage has taken place in

the General Motors plant in Oshawa. The Royal Canadian Mounted Police have been in communication with General Motors Company officials in Oshawa. There is no evidence that such acts of sabotage are attributable to communist efforts.
The next question was:
Has there been a deliberate communist campaign to slow down production and upset the morale of industrial workers engaged in defence production at Oshawa, Ontario?
To that question I would reply that there is no evidence of such a campaign being waged at the present time.



EMERGENCY POWERS ACT


Louis Stephen St-Laurent: the third reading of Bill No. 24, to confer certain emergency powers upon the governor in council.


Mr. George A. Drew (Leader of the Opposition):: Mr. Speaker, since this bill first came before the house a number of things have occurred which have some bearing on the effect of the bill itself, if and when it becomes law. The Prime Minister (Mr. St. Laurent), in words that have already been referred to today, indicated that any controls which might be considered or introduced by the government would be dealt with under this act. Having regard to what has occurred since the bill was first introduced and the last discussion took place, it does seem to me that there are certain considerations which should be in the minds of members at this time and which, even at this stage of the bill, should be presented to the government as reasons for a clearer statement of government intention.
We have been told that it is the intention of the government not to introduce price or similar controls at this time. In fact less than a week ago the Prime Minister made a speech in which it was indicated that the government would be unlikely to introduce controls of that nature unless we were in something approaching an all-out war. Since that time we have had before us the defence production bill, and we have heard certain discussions of that bill which certainly gives most sweeping powers to the government over various commodities, supplies and requirements of the people which do affect the cost of living.
In discussing this subject again today I wish to emphasize one fact. In advocating the adoption of some measure of control which will meet the immediate inflationary pressures I do so in the belief that we should
Emergency Powers Act do all we can in this country to preserve a free economy. I have sought to make it clear that I am convinced that unless something is done to restrain the mounting spiral of inflation there will be a diminishing measure of confidence in the minds of the people of Canada in the ordinary operation of that free economy.
I have said on an earlier occasion, and I repeat today, that the sooner appropriate steps are taken to exercise that measure of control which is needed to balance the sudden and unusual inflationary pressures created by government spending, the sooner we may hope to return to a really free economy. It seems to me that to those who believe in a free economy the proposition before us is simple.
A free economy must depend upon free production and free distribution. Where there is free production and competition in production, which through skill and design and efficiency bring about a reduction in cost, then that competition in itself can reduce the ultimate price of the article.	It is only
where there is a possibility of reduction in cost by competition, and competition within a free economy, that there will be offered any measure of protection to the general public.
However, once there is a broad and substantial restriction of free production I submit it is perfectly clear that you cannot have free and unrestrained distribution unless there is a large measure of danger that the public will pay the price of quick and easy speculation in those articles which are then in short supply.
Those who listened to an interview over the radio last night with the Minister of Trade and Commerce (Mr. Howe) heard this very point mentioned. He pointed out that at the present time there is a serious shortage of a number of basic commodities and important supplies. He pointed out the basic consideration that should be in the mind of everyone discussing this subject at this time -the abnormal demands of the government for all kinds of supplies for defence equipment, limiting the amount of those supplies available for ordinary civilian consumption, and therefore creating the most inflationary kind of pressure that there can be.
It is in the presence of such a situation that we see in the last month a jump in the cost of living to the highest point in Canadian history, and we realize today that the Canadian dollar is only a fifty-seven cent dollar based on its value ten years ago. What is more, we know that the food dollar, which is the most important dollar in every household, is today well below fifty cents. That is the situation with which we are
950	HOUSE OF
Emergency Powers Act confronted, and it is to meet it that I have urged in this house that the government, supporting the proposition that a free economy is what we wish to preserve, should maintain confidence in that free system by balancing in some way the immense pressures that have already been created and the far greater pressures that are going to come within the next few months. To use a colloquial expression, but one that everyone understands and will come to understand in relation to this subject, we haven't seen anything yet. It is the immense expenditure contemplated by the defence production bill now before the house that is going to create inflationary pressures far beyond anything we have yet known.
We have sought some information from the government as to positive steps that might be taken by them under this bill. Before we pass the bill I would point out that in presenting this argument I was careful to emphasize my own belief that we should not simply adopt measures that had been tried once before. I suggested rather that, with all the accumulated skill built up as a result of the administration of other control measures, there should be devised in Canada the most flexible and most effective type of control, the type of control best designed to preserve our free economy. I used the expression that I thought it was possible for the Canadian people, young and vigorous as they are, to devise a system of control which will meet the emergency pressures until civilian and military production going side by side are capable of meeting the demands in both fields.
In bringing this subject before the house again at this stage of the discussion, I wish to say that there is no single country in the world, including the United States, which can hope to stem inflation as well as we can in Canada. I make that statement because there is no country in the world today which has the opportunity and the ability to expand its production in the way we can to meet both civilian and defence requirements. The moment that we can meet both civilian and defence requirements in any line of production, then the need for control over that particular article or commodity disappears.
It is while there is a short supply that the need exists, and the shorter the supply of any article as a result of defence spending the greater the inflationary pressure on that particular article or commodity. I was careful to point out that we were simply asking that, with all the experience that has been gained, this government introduce the most flexible and effective method of controls which would meet the situation.


It will be recalled, Mr. Speaker, that when I urged that the house be informed as to anything that was contemplated by the government under this measure to deal with this subject, we were told that the government had nothing to place before us. For that reason I was interested to learn that the Minister of Trade and Commerce was prepared to make a statement on this subject last night. As reported by the Canadian Press, the Minister of Trade and Commerce last night informed the people of Canada over a national radio network that control of profit margins is being considered by the government to meet the situation which I am now discussing. In view of the requests we have made in the house, I suggest that the appropriate place for such information to be conveyed is in the House of Commons where we are discussing this subject.
In the Canadian Press report of the statement by the Minister of Trade and Commerce last night, as contained in today's Globe and Mail, I find these words under dateline of March 5:
Trade Minister Howe said tonight the government, still opposed to a general price freeze, is considering commodity margin of profit control as one of several weapons to fight price inflation. "We'll have something to say on that before many weeks go by" . . .
This subject, Mr. Speaker, has been under consideration for many months. It was discussed in the House of Commons last September. At that time I introduced an amendment to the motion for the adoption of the address in reply to the speech from the throne expressing regret that the government had not taken appropriate steps to deal with inflation and the cost of living. The subject was then discussed in some detail, and obviously the government has had it under consideration all this time. I suggest that before the house gives third reading to the bill, without debating the contents of the bill which has now been dealt with so far as the principle is concerned on second reading and so far as detail is concerned in committee, the house should be informed exactly what the government intends to put into operation when the bill becomes law. If the government has in mind the introduction of control of profit margins, then may I urge upon the Prime Minister the desirability of the people's representatives in the House of Commons being informed today just what the plans are which were referred to last night by the Minister of Trade and Commerce.
There is one more reason why we should be informed, and why the people of Canada should be informed, through the press and over the radio, what the plans are. The

Minister of Trade and Commerce, no matter what his views may be on other subjects, is not so innocent of ordinary practices in this country to be in any doubt as to what will happen if it is believed there is going to be control of profits and nothing is done. He has already indicated what happens in cases of that kind, and we would assume, in view of his association with price controls on earlier occasions, that he would speak with some knowledge on this subject. He pointed out that one of the difficulties in dealing with controls at this stage is that the government did not move in as they did when price controls were introduced before. He explained that the element of surprise was lacking, and for that reason he said adjustments had already been made to meet the situation. Then, he used those words which the house is not likely to forget, "They are all set."
If the people to whom the minister was referring on that occasion were set, they are going to take care that they are even more set if they think controls over profits are to be introduced. This is simply another inflationary pressure created by the government itself. The minister, who seems to have such an influence over most departments of government, has said that within a couple of weeks we may expect further information. I suggest that the time for that information to be received by this house is now, and before this bill receives third reading.
There is one other consideration that should be in the minds of the members in dealing with this subject. The Prime Minister indicated some of the reasons why this bill was being drawn in such general terms. He also indicated that he thought there should be some limitation on the scope of the bill when it becomes law, because he believed it was desirable to impress upon the people of Canada the fact that we are not in a period of war; that we are in fact striving for peace, and that is the idea that should be emphasized in the public mind. I believe there was general agreement with that proposition. What was emphasized in relation to that subject, however, was the fact that there is a long period of emergency ahead of us, and that it would be desirable to retain as much as possible of our ordinary peacetime atmosphere and ordinary peacetime arrangements as we would be able to carry forward over an extended period with as little strain as possible upon our economy and upon our people. It is for that reason that concern should be felt about wide powers of this kind unless the full intention of the government under those powers is indicated to members of parliament.
Emergency Powers Act
In regard to the sweeping nature of the powers, the Prime Minister had something to say which I thought did not receive sufficient attention at the time, and which should be in the minds of the members before this bill becomes law. Referring to the reason for the powers which, with few exceptions, are as wide as the powers under the War Measures Act, the Prime Minister had this to say, as reported at page 807 of Hansard for March 1:
With respect to the extent of the powers, it would be a much easier thing to do if we could come here and say: This is what is going to have to be done and nothing more is required.
A little later on the same page he had this to say:
But with the possibility of various things that we just cannot determine at this time having to be done, in order to meet the changing conditions, I suggest that the powers have to be drawn in fairly broad terms. We did not want them any broader than the Department of Justice told us was enough. But what they say is this:	These things mean
restrictions on some individuals and they are subject to contestation before the courts. It is therefore important to have the language so broad that the courts will not say:	"You have gone beyond what
parliament authorized you to do."
Parliament, Mr. Speaker, has not authorized the government to do anything, because we have not been told what the government intends to do. Therefore, this would be an utterly meaningless statement unless it were intended by the wording of this bill that the government, by order in council, from time to time may do things far beyond anything that has been suggested in this chamber during the discussion of the bill. We have asked the government to tell us a single thing they intend to do, and they have not told us one thing. Therefore the suggestion that parliament is going to say what the government can do, and that the government is only going to do what parliament has said it can do, is meaningless and will be misleading to the people of this country if they accept it as the limitation under which the government legislates by order in council within the terms of this bill when it becomes law. It is for that reason, Mr. Speaker, I repeat my request that the Prime Minister inform us fully as to what these controls of the profit margin are to which the Minister of Trade and Commerce has referred, so that there may not be further inflation by procrastination; further inflation by invitation; further inflation simply because someone is trying to get set. In using those expressions I am only using the words that have been employed by the Minister of Trade and Commerce, who has had wide experience in dealing with the subject matter that might be contemplated by this bill.
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Emergency Powers Act
I know, sir, that the Prime Minister, in his own mind, would have no thought that we should abandon our democratic parliamentary procedure. He has had too long and too intimate an experience with the profession with which he has been so prominently associated in distinguished capacities to be willing to contemplate a situation of that kind. But may I point out to him that the pages of history all too frequently record cases in which freedom was surrendered in the name of efficiency in the face of an emergency. Over and over again throughout history there have been tragic examples of free legislative bodies handing over their authority to meet an emergency and then not being able to recapture that authority at some future time when those with a different point of view were unwilling to surrender those powers.
To the statement that I have just made the Prime Minister can answer that this bill will terminate next year. In that respect may I point out, Mr. Speaker, that if in the present emergency this bill is necessary, then it will be necessary next year to renew the measure, or an even stronger one, because we are passing a complementary measure, the Defence Production Act, which is to continue for five years and which obviously will go in double harness with this bill now before us. Therefore unless the government is going to introduce or bring into effect by proclamation a still stronger bill, this legislation will continue for some years, and there may come a time when, through pressures, through force of circumstances that we cannot now envisage, a government of another day might be unwilling to abandon the powers so obtained.
The Prime Minister may also say: This is in the hands of parliament. In answer I would say that we have not seen too much evidence, during this session or preceding ones, that there is that measure of independent expression of opinion by the large number of supporters of the government in this house which would suggest to those who are concerned about the trend we now see that we might hope that within this house there would be a vote which would place any effective restraint upon a government which commanded a majority of that kind. Unless we return to established and tested principles of parliamentary democracy we may in fact at this hour be in the twilight of freedom here in Canada, no matter how much we believe in freedom itself. We Canadians can pay the penalty of surrender just as other people have paid the penalty of surrender of those principles which protected the freedom in which they believed.


I suggest, sir, that at this time the Prime Minister should inform us as to the subject matter of the statement made by the Minister of Trade and Commerce last night; and also that at this stage the Prime Minister should give us sufficient indication of what is intended so that we who represent the people in all parts of Canada may know in fact what it is that parliament is really being asked to do and what powers we are in fact conferring upon this government.


Robert Ross (Roy) Knight: Mr. Speaker, I hope to relate my discussion of this bill to the matter of the high cost of living and the matter of price control. It is, of course, true that this matter has been discussed before. I cannot at the moment think of anything that has not been said about it before. But I am hopeful that the constant dropping of water may help to wear away the stone, and that finally this government may come to the realization that the members of this house and the' people whom they represent in the country are thinking seriously about this thing.
As to my attempt this afternoon to move that the house be adjourned while the matter be discussed, I of course bow gracefully to the ruling of Mr. Speaker, who is always so fair in his decisions. I should like to point out that since the Herridge-Knight amendment-if I may call it that-was moved things have progressed in the matter of the high cost of living, as has been mentioned on an occasion or two here this afternoon. That is the reason why I thought there was sufficient urgency in the matter for it to be brought before the house and the country without any delay. The rise in the cost of living is a source of continual agitation to the public mind. Everywhere it is a subject of private conversation and of public protest. Everywhere people are finding difficulty in purchasing the necessities of life without going into debt. The situation is only tolerable to those who have sufficiently high incomes as not to be too badly affected by it; that is, those people with respect to whom a high proportion of their income is not spent upon their living. Even those whose wages have been increased in some conformity with the increase in the cost of living are waging a losing battle in that their wages and salaries cannot keep pace with increased costs. Even the farmer, whom we have usually been accustomed to regard1 as a person who can live in any case because he is more selfsufficient than most of us in town, is having his.own troubles. In fact, I think that he is particularly hard hit, so great has been the rise in the cost of the production of the commodities by the sale of which he earns his bread). Indeed, while the cost of his living

has been going up, the price index of what he has to sell has been going down somewhat during the last two years.
But it is the people on small fixed incomes who are the greatest sufferers. First in that class come the old age pensioners. We as members of parliament come in contact with many of these people and we know exactly the conditions in which they live. Any increase they have had in pension, either in the form of the basic pension or in bonuses, has been long ago wiped out and absorbed, and their standard of living is going down in proportion to the extent to which prices have been rising. The same is true of those veterans who are on disability pensions. It is true of superannuated people, including civil servants and the rest.
The urgency of this matter is emphasized by a consideration of the cost of living index. As at January 1 we were told that this had reached the hitherto astounding figure of 172.5; but statistics published within the last few days show that the general index now is 175.2, as has been mentioned here today by the leader of the opposition (Mr. Drew). That represents an increase of 2.7 in a single month. What will it be a month from now is the question we might ask, or a year from now, unless something is done now to check it.
It is fitting that a protest about this matter should be made by a member of this C.C.F. group. For six years we have been pleading with this government, almost daily during the sessions, to do something about it. That is one of the reasons why, as I mentioned before, there is little new to be said about it or little new in the way of argument that we can advance today.
This government has done nothing about it; in fact, the attitude of the government has been negative rather than positive. They have adopted a wait-and-see policy. They talk of mark-up control perhaps, but not price control. To sum it up, one might say that they fiddle while Rome burns. The Minister of Finance (Mr. Abbott) has from time to time tried to lull us into a state of passivity by telling us that the situation will remedy itself. Prices will level off, he said, with the increased production, and he was sure that business and manufacturing people generally would not take undue advantage of the situation in order to raise prices. Well, that hope, like certain other hopes the minister had, proved to be badly founded.
Again the government, by its talking of :ontrols and its refusal to do anything about [hem, has itself given an impetus to the very rise in prices which they desire to check.
Emergency Powers Act The bill before the house at the present time is one under which price controls can be imposed if the government so desires. The very existence of that bill, which would furnish the machinery for such control, is itself a hint to certain business interests to put up their prices while yet they may. There are two attitudes which I think I can discern on their part: (a) let us make what we can while the opportunity exists; and (b) let us get the prices up to a point at which they will still be profitable, and very profitable, even if they are frozen.
My Liberal friends, who support this government, continue to support it just as 'loyally in its attitude on price controls as they do for everything else, despite the fact that they must have been showered by resolutions, wires, letters and cards and other expressions of opinion asking for a price control policy, and in spite of the publication of the results of a poll, which in so far as such polls are accurate, show the vast majority of the people in this country in support of some form of price control now.
As to my Liberal friends, the hon. members from Saskatchewan, they will remember that in that province a number of meetings were held months ago to which they were invited to discuss this very question. They saw fit not to attend those particular meetings.


Mr. Ferrie:: C.C.F. propaganda.


Robert Ross (Roy) Knight: My hon. friend, whose only contribution to this house ever since he has been here is unmannerly interruptions, might make a speech on this question one of these days and give us some of his opinions, rather than maintaining that intelligent silence which does not befit him-or does it?
I was proceeding to say that the Liberal leader in the province of Saskatchewan was induced to attend one of these meetings in my own city, sponsored by the trades and labour council. He could go to that one because it was not sponsored by the C.C.F. There the Saskatchewan Liberal leader opposed price control and defended the inaction of this government in regard to it.
I said that my Liberal friends show a lack of interest in this matter, but that is not altogether a new thing; for I must remind this government of an occasion when the hon. member for Rosetown-Biggar (Mr. Coldwell) moved an amendment in this house asking for the imposition of price controls and the provision of subsidies. My hon. friends explained the unfavourable vote on that motion to their constituents by saying that the matter involved a vote of confidence and would bring about the ultimate catastrophe which in their opinions would be

Emergency Powers Act the defeat of this government. I want to remind them that this occurred on September 2, 1950, and there appear to have been 110 Liberals absent from the house when the vote was taken on that question. There was no question there, sir, of a lack of confidence in the government. Were they not interested in this question? At any rate they were not here. In view of the importance of the subject, that does not seem to me to be too creditable a performance. All this in spite of the fact that in the election campaign of 1945 the Liberal party promised not only to retain the price controls which were then in existence, but in some cases even talked about rolling back prices to the level of 1941. The country may judge today how these promises have not been kept.
At this session of the house even the members of the Conservative party and the Social Credit party have asked for some form of price control. The leader of the opposition (Mr. Drew) has said I think today and also on a previous occasion in my hearing that while he made it abundantly clear that he believed generally in a free enterprise system, things in this particular regard have reached such a stage that something must be done about price control, and it must be done at once.
In conclusion, sir, may I say that this present inflation is a threat to our whole economy. It is confiscating the savings of our people; it is reducing the real value of bonds and insurance funds. It is enemy action of the most potent kind, and it can scuttle the defence program on which this government is embarked at the present time. It is the greatest domestic problem which confronts us at the moment.
Once more I indict the government for its apparent callousness in regard to it and demand that even at this late hour they put a stop to it. They will have taken one allimportant step in that direction when they have restored the excess profits tax, controlled and rolled back the cost of living, and resumed whatever payment of subsidies is necessary in order to allow the people to purchase the basic commodities of life at reasonable prices.
Once more 1 urge these steps upon the government of the day.


Gladstone Mansfield Ferrie: May I ask the hon. member a question? Will he answer a question?


Robert Ross (Roy) Knight: Yes.


Gladstone Mansfield Ferrie: Will he kindly name where he wants the controls and how he wants to put them on?
{Mr. Knight.]


Robert Ross (Roy) Knight: If my hon. friend were listening to my statement as assiduously as he interrupts these debates he would know.


Gladstone Mansfield Ferrie: Answer the question.


Robert Ross (Roy) Knight: I do not have to answer any questions of the hon. gentleman.


Gladstone Mansfield Ferrie: All right; sit down and don't answer.


Robert Ross (Roy) Knight: I would suggest to my hon. friend that had he attended some of the meetings in Saskatchewan which he was invited to attend he could have put forward his views to the people of the country and compared them with ours.


Gladstone Mansfield Ferrie: They were too red.


Robert Ross (Roy) Knight: My hon. friend refused such an invitation.


Mr. Warren:: Answer him more quickly.


Robert Ross (Roy) Knight: If my hon. friend invites me to go into the history of those meetings in Saskatchewan I can do it. I have it all, word for word.


Mr. Deputy Speaker:: Order.


Robert Ross (Roy) Knight: I think I shall spare my hon. friend's feelings in the matter. I might be able to tell him something that he would not [DOT]like to hear.


Gladstone Mansfield Ferrie: I should like to ask another question.


Robert Ross (Roy) Knight: Make a speech.


Gladstone Mansfield Ferrie: The hon. member talks about controls. As a representative of western Canada would he advocate that the livestock markets in the United States be closed to Canadians? Would he advocate that? That is a good control.


Robert Ross (Roy) Knight: Another red herring.


Mr. Mutch:: You do not know the difference between herring and beef.


Robert Ross (Roy) Knight: Another red herring dragged across the trail.


Gladstone Mansfield Ferrie: You are a member from western Canada. Answer the question.


Major James William Coldwell: Mr. Speaker, is it not possible that we may debate with some degree of courtesy and intelligence rather than have interruptions of that sort?


Mr. Deputy Speaker:: Is it the pleasure of the house to adopt the motion?


Stanley Howard Knowles: Mr. Speaker, I should like to add my appeal to the one that has just been made by my colleague from Saskatoon (Mr. MARCH G, 1951
Knight) for immediate action on the part of the government establishing price controls and making provision where necessary-


Ralph Melville Warren: Wage controls?


Stanley Howard Knowles: -for subsidies, so as to hold down the cost of living and to protect the health and living standards of our Canadian people. I always try to make speeches-


Ralph Melville Warren: And apply wage controls?


Stanley Howard Knowles: If the hon. member for
Renfrew North (Mr. Warren) will just contain himself, I shall deal with the question he is trying to interject at this point, as I have dealt with it many times before. I suggest to him that I have the floor.
I had started to say that I like to make speeches which, though they may appear a bit academic at times, are built up from one point to another, and arrive at conclusions. Indeed, I like to restrain my language as much as possible. It seems to me, however, the time has come, in connection with this question of the rise in the cost of living when, on behalf of the people we represent, we simply must stand in our places and say to the government, "Quit stalling; quit making excuses". For all that has been said so far by the government simply adds up to inaction, so far as price controls and subsidies are concerned.


Ralph Melville Warren: Wage controls?


Stanley Howard Knowles: During the course-


Ralph Melville Warren: What about wage controls?


Stanley Howard Knowles: -of the discussions that
have taken place with respect to this question, various attitudes have been displayed. Speaking in the budget debate last fall, the Minister of Finance (Mr. Abbott) dealt with the matter in an academic fashion. Among other points he tried to make was his contention that we could not go in for partial price controls, and that if we are going to have it at all we had to have a complete system of controls. He indicated, however, that that idea was anathema to the government, and that it was the hope of the government that other measures would prevent further inflation. So we got no action.
The cost of living index figure available to us in September of last year, when the Minister of Finance made that argument, stood at 168-5. It has since gone up to 175-2. In other words these other measures supposed to prevent further inflation simply are not working. I suggest it is time to have done with these fine academic points the minister mentioned; it is time to resort to
Emergency Powers Act the policy the government practised so effectively during world war II. I would remind them again that from 1941 to 1945 the cost of living index rose only from 111-7, which was the average in 1941, to 119-5, the average in 1945, or only 7-8 points in four years. That was the record of this government in price controls.
Not only did the government achieve such an enviable record in holding down the cost of living, but on April 1, 1947, Mr. Ilsley made it clear that the total cost of that program, both in administration and subsidies, had returned to the Canadian people as a whole, individually and through government expenditures, $12.50 for every dollar spent. At the same time Mr. Ilsley pointed out that that price control program had saved defence costs of the government to the extent of at least 25 or 30 per cent. I mention that in passing because we are now heading into huge defence costs and, without price controls, I suggest there is no question but that the figure of $5 billion now before the house will be considerably greater before that program is completely implemented.
Another line of argument taken is that which has been suggested by the Prime Minister (Mr. St. Laurent) from time to time, namely that it is a matter of timing. He has not said that the government is finally and irrevocably opposed to price controls. He has indicated that if the government comes to the conclusion that they are necessary and that they will be effective, it will be prepared to launch such a program. But if I read correctly his remarks the other evening when addressing the Liberal meetings held in this city, he indicated it was not the intention of the government to do what he called any shadow-boxing, so far as this matter is concerned.
But while these excuses for not bringing in price controls are being given, the cost of living index continues to rise. It was only 172.5 when the Prime Minister spoke to the Liberal meetings held at the Chateau Laurier last week. The official index now however is 175.2, or another increase of 2.7 points.
Another line taken is that offered by the Minister of Trade and Commerce (Mr. Howe), as set out last night in a press conference that was broadcast. He has indicated the government is considering or may consider mark-up control, so far as the margin of profit is concerned. There again we are getting only consideration; there again we have not a control that will hold down the cost of living, but only the kind of warning
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Emergency Powers Act that can result in further increases in costs before even that partial form of control is brought in.
We had it made clear to us yesterday by the Prime Minister that the kind of controls that will come under the Minister of Trade and Commerce,, if and when he becomes minister of defence production, will be in that field; they will be controls of basic commodities involved in the defence program, but no more. The Prime Minister indicated that if there is to be any general program of price controls it will not be under the aegis of the minister of defence production, but will have to be done under the terms of the bill we are now discussing.
I suggest that any reference to a partial control, a control over basic commodities only, such as the Minister of Trade and Commerce says is being considered, does not fill the bill. Meantime the cost of living index is still rising, and is making the problem our people face so very serious that, as I have said before, they are writing to us today not in puzzled tones but in fear and panic and with frantic apprehension of what lies ahead, with the cost of living still going up.
At February 1, the index figure was 175.2. It is probably higher now, but we do not know what the figures are until the month has elapsed. That means that, in terms of 1935-39 standards, the dollar today is worth only 57 cents. If it goes on up to 200, which can happen in a matter of months, the Canadian dollar will be down to 50 cents in terms of the purchasing power of 1935-39.
On September 13, when we were here attending the special session, I made some comments as to what might happen if the cost of living index went up to certain incredible figures. At that time the latest figure we had was that of 168.5 for August 1. I suggested what might happen if it went to 170 or, perchance, to 175. I have no doubt that there were some who thought that would not happen. Here we are back in another session and the cost of living has gone to that figure. If it keeps up the rate of increase that has been in effect for the last few months, in fact if the present acceleration is maintained, it will be only a matter of months before we will be up to 200. I hope the government is not waiting for that round figure before it does something about price control. I submit that the time is long overdue for that action. I submit this is no time for the government to answer these pleas by academic arguments and by the various positions that are taken. The Canadian people are calling for action; they are calling for price controls.
[Mr Knowles.]

I submit that it is significant that although this party has been at it for six years, ever since there was first talk of taking off price controls, not only have the Social Crediters joined us in this appeal but so have the Progressive Conservatives who for many sessions were opposed to us in the stand we took. For many sessions they called upon the government to get rid of controls faster than it was being done, but they are now insisting that action be taken in this connection.
We all know the appeal that was made over the radio the other night by the leader of the Progressive Conservative party (Mr. Drew) calling upon the people to flood members with letters urging them to take that action. I was glad to note in the paper the other day that the hon. member for Eglinton who sits near me is one of the recipients of many letters which are coming in.


Donald Methuen Fleming: Who said that I was getting a lot of letters?


Stanley Howard Knowles: Arthur Blakely of the Montreal Gazette said that one of the results of your leader's plea was that you were getting a great many of these letters.


Donald Methuen Fleming: I think I ought to enter a correction about that. I did not receive a flood of letters; I received three letters on this subject in the last week.


Stanley Howard Knowles: Apparently the constituents of the hon. member for Eglinton realize that he is incorrigible, that even though the rest of the Tory party may have taken the position that price controls must be brought in, he does not yet agree. But I hope he will soon. But what is more important, let us hope we can convert the government even before that.
I think I should take another moment to indicate in a brief but nevertheless comprehensive manner what has happened statistically with regard to the cost of living index. The average cost of living index for 1941 was 111.7. I mention that year because that is the year price controls were instituted in world war II. By 1945 it had risen by less than eight points to 119.5-less than eight points in four years. It was in 1945 that decontrol first began. We find that in the next year it went up 4.1 points; the next year, 11.9 points; the next year, 19.5 points; and the next year 5.8 points, which brought it to 160.8 as the average for 1949.
By February 1, 1950, it had gone up still further to 161-6, and now, a year later, as at February 1, 1951, it has gone up nearly another 14 points to 175-2. Six points of that 14 points increase this past year occurred during the first six of the past 12 months while eight points occurred during the last

six months. In other words, we are at a time when this increase is accelerating. The bulletin issued the other day by the dominion' bureau of statistics indicated that the wholesale cost of living index was still rising. On that basis we can expect still further increases as additional monthly reports come in from the dominion bureau of statistics.
It is also to be noted that the report as of February 1 did not include any increase in rents. I believe that that will be in the next month's figure, covering three months, so unless the government takes action we can anticipate still further rises in the cost of living index until perchance it reaches 200.
I do not know at what point it becomes runaway inflation, but for many people it is runaway inflation already.
My colleague, the hon. member for Saskatoon (Mr. Knight), mentioned a number of groups on fixed income who are hit particularly hard by these increases in the cost of living. He referred to old age pensioners, veterans on disability pensions or on burnt-out pensions, superannuated civil servants and retired people living on any kind of fixed incomes, as well as others who in many cases have their incomes fixed for long periods of time.
May I say just a word about the position of old age pensioners. In June of 1950 the cost of living stood at 165-4. Old age pensioners were then getting as a maximum, under federal law, $40 per month. Forty dollars per month in June 1950 on the basis of the cost of living index at that time was worth only $24.18 in 1935-39 dollar values. As at February 1, 1951, with the cost of living index at 175-2, in terms of 1935-39 dollar values, $40 had shrunk to $22.83. That meant that from last June until now the purchasing power of the old age pension in terms of 1935-39 dollar values had decreased by $1.35 per month.
There will be some who will want to argue that we were paying old age pensioners $40 per month last June in 1950 currency. On that basis the increase in the cost of living index from June 1950 to February 1951 results in the $40 of last June being worth only $37.76 as of February 1, a decline in purchasing power of $2.24. Why did I pick June, 1950, and compare it with the latest figure which we have for February 1951? I did that deliberately because in June 1950 there was tabled in this House of Commons a report from a special committee making certain recommendations with regard to old age pensions. That committee was unanimous in its recommendations that the means test should be abolished at age 70 and that the pension should start at 65. The majority of the committee did not favour recommending
Emergency Powers Act that the amount of the pension should be increased; it was left where it was, at $40.
Look at what the rise in the cost of living has done since June of 1950. It has taken away from old age pensioners an amount equal to $2.24 per month. By that means we have reduced old age pensions paid in this country to $37.76. That has been done simply by allowing the cost of living index to go up the way it has. The rise in the cost of living has literally stolen $2.24 per month from our old age pensioners. I submit on their behalf, as well as on behalf of all others who are trying to get along on small amounts of money, that something simply must be done about the cost of living.
One might say in passing that these figures call for an amendment of that basic old age pension program recommended by the committee of last year. Forty dollars is by no means enough, but even before the government may get around to that it must bring in price controls to protect that amount from going any lower than is the case at the present time. What holds for old age pensioners holds for veterans on disability pensions, veterans on burnt-out pensions, superannuated civil servants and those on fixed income. What holds for these people is experienced, too, by the average worker and the average housewife in this country who are simply at their wits' ends trying to make both ends meet, trying to maintain some sort of decency in terms of health and living standards. So it is on that basis, Mr. Speaker, that I make this strong plea to the government to quit making excuses, to quit stalling and to bring in price controls.
At an earlier stage in the debate on this same measure I was making a plea like this, perhaps in shorter form and in language not quite so strong, when the Minister of Trade and Commerce (Mr. Howe) interrupted with the suggestion that I could do something about this if I would persuade my friends in the labour unions to agree to a two-year freeze on both wages and prices. It is perfectly true that no one supports the idea of a freeze on either wages or prices but the country is calling for controls on prices and, as I indicated to the minister the other night, the labour movement, given price controls, is prepared to sit down with the government and management and work out a program of wage stabilization.
When I pointed that out to the Minister of Trade and Commerce the other night he made no answer to me but his answer to the hon. member for Kamloops (Mr. Fulton) was that it was the unwillingness of labour to come along in this kind of program that was one of the reasons why the government was failing to take action. Later, when the hon.

Emergency Powers Act member for Broadview (Mr. Hees) asked the Prime Minister (Mr. St. Laurent) directly whether the government had accepted the offer of the four major labour bodies of Canada to sit down and discuss this matter, the Prime Minister said no. He made it very clear in the remarks he made later, as the hon. member for Rosetown-Biggar (Mr. Cold-well) pressed him on the point, that this was a decision to be made by the government. He said that if a time was reached when the government thought that price control would be an effective way to deal with this problem they would seek the co-operation of all sections of the Canadian community, and one of those sections was certainly labour, which they would call in. In other words, it is quite clear that labour is not the reason that price controls are not being gone ahead with, despite what was said by the Minister of Trade and Commerce.
Labour has made an offer to sit down with the government and management and discuss the question of wage stabilization, provided there is readiness on the part of the government to proceed with controls on prices and production. I emphasize "wage stabilization"-not wage freezing. The other evening the Minister of Trade and Commerce, while he did not say so to me, said to the hon. member for Broadview that he doubted whether he could substantiate the offer that he said-and that I said-was made by the four major labour bodies in this country. I have in my hand a copy of the pamphlet containing the submission on price controls to the government of Canada by the Trades and Labour Congress of Canada, the Canadian Congress of Labour, the Canadian and Catholic Confederation of Labour, and the dominion joint legislative committee of the railway transportation brotherhoods, which was presented to the government on February 20 of this year.
This is a submission calling for price controls. It does not ask for a price freeze. It asks for control of prices and it musters a whole barrage of arguments as to why that course should foe pursued immediately. However, since the question was asked as to what is the attitude of labour towards wage control I read to the Minister of Trade and Commerce the other night, and I am going to read it again, paragraph 23 of this submission. It is as follows:
The labour movement recognizes that wages could go up fast enough and far enough to break a price ceiling, though it sees no immediate danger of anything of the sort. It believes that the proper way to deal with this question is a government-labour-management conference to work out methods of wage stabilization. This offers a prospect of a wage policy which will do two things, both essential: (a) preserve the spirit, the principle, of collective bargaining, and (b) bring the experience of 
labour and management into the defence effort. If our government institutes a general policy of price and production controls, labour is ready to take part in a joint government-labour-management conference to consider wage stabilization.
I said that the question was raised the other night as to whether members on the floor of the house could make that offer in firm terms. The result was that the exchange between the minister and myself, with others involved in it, reached the newspapers. In fact the Ottawa Citizen even went so far as to publish my picture with the story.


Donald Methuen Fleming: Have they come to that?


Stanley Howard Knowles: It seemed to me that a
picture of the Minister of Trade and Commerce ought to have been there alongside mine.


Donald Methuen Fleming: What has he done that is
wrong?


Mr. Howe:: The publisher is a friend of
mine.


Stanley Howard Knowles: The result is the authors of the brief are aware of the fact there was some discussion of the position they took. Therefore I decided today that I would get in touch with those of the authors of the brief whom I could reach by telephone. I talked to Mr. Percy Bengough, president of the Trades and Labour Congress of Canada. I asked him if he had noticed what had happened in the house and he said he had. I read to him the last sentence of paragraph 23, which I have just quoted, and I will quote it again, namely:
If our government Institutes a general policy of price and production controls, labour is ready to take part in a joint government-labour-management conference to consider wage stabilization.
I said to Mr. Bengough in the clearest language I could: "Do you still stand by that offer?"	His answer was one word-
"Absolutely." I also talked to Mr. A. R. Mosher, president of the Canadian Congress of Labour and also president of the Canadian Brotherhood of Railway Employees. In addition I talked to Mr. Pat Conroy, secretary-treasurer of the Canadian Congress of Labour. I asked both of them the same question. I referred to paragraph 23, and particularly to the last sentence. I asked them if their organization, as one of the four involved in this submission, still stood by that sentence. By a strange coincidence, though I talked to them at different times by telephone, both of them used precisely the same word as Mr. Bengough had used- "Absolutely."
I pressed them further. I said to Mr. Mosher and Mr. Conroy: "Can I quote you on the floor of parliament? Can I indicate that I have your authority to say that your

organization still stands behind the offer made in paragraph 23?" Both of them said that I could. Therefore I say to the government and to those government supporters who keep raising the question of wage control that the position of labour has been taken in a clear-cut and responsible manner. Labour has said to the government:	We do
not think there is any danger of wage increases breaking a price ceiling. If I may go back to another paragraph in this brief, they have said: We do not think that you should decide the question by repeating the jingle: Price control means wage control; price control means wage control. Nevertheless they hav^ said that, given a readiness on the part of the government to institute a general policy of price and production controls, labour makes an offer to sit down with the government and management in a joint conference to consider wage stabilization.
Therefore, Mr. Speaker, labour does not stand in the way, and if I may anticipate, another group in our community will be spoken for by another member of this group a little later in this debate, and it will be indicated by him that the other large occupational group in Canada does not stand in the way either, so far as price controls are concerned. Our old age pensioners are clamouring for them. All our people on fixed incomes are at their wits' ends. Workers and housewives are insisting on price controls. Members of parliament on the opposition side are united, hoping as I do that the hon. member for Eglinton (Mr. Fleming) will yet be with us on this score.


Donald Methuen Fleming: Let the hon. member for
Eglinton speak for himself once in a while.


Stanley Howard Knowles: All parties on this side of
the house are united so far as our position on price controls is concerned. I am sure there are many members on the government side who agree with us, because when votes have been taken on this question, although government members of the house have voted against our amendments calling for price controls, there have been a significant number who have been absent during those votes. I am sure that behind the closed doors of their caucuses these members speak to the government just as strongly as we are speaking to them across the floor of this house.
It all adds up to this, Mr. Speaker, that the only group standing in the way, the only group refusing to take action, is the cabinet. They are making one excuse after another. They are stalling in the face of a very serious situation that can result in runaway inflation which can ruin our people and spoil our whole defence effort. I submit there is no
Emergency Powers Act time for any more of this stalling. I call upon the government, just as soon as this bill has been passed, to use the powers contained therein to institute immediately a program of price controls, to bring in subsidies where necessary, and tc make sure there are no further increases in the cost of living in this country.


Mr. H. R. Argue (Assmiboia):: Mr. Speaker,
I should like to take part in this debate to make one point, and that is that the farmers of Canada are agreed that over-all price control is necessary at this time for the welfare of agriculture across Canada. I am making that statement, and I shall muster my arguments during the course of my speech. For example, let us take the position of the wheat farmers, an important segment of the agricultural population of this country. Let us look at what they have to gain from price control, and what they have to lose from continuing inflation. The price of wheat is in fact frozen in that most of it is being sold through the international wheat agreement at a fixed ceiling price in United States dollars. There is an effective ceiling price on wheat at a time when the farmers' cost of production continues to rise.
In a brief submitted to the cabinet, the Canadian Federation of Agriculture had this to say on page 3:
With no immediate prospect of generally higher farm prices, farmers in some lines of production will be severely pinched in the price-cost squeeze in 1951.
That statement by the Canadian Federation of Agriculture certainly applies to the wheat producers of Canada. We know that the farmers of western Canada are today asking the government for a further substantial payment with regard to the five-year pool. I refer to that in this debate only to make this statement, that had the government maintained general price control throughout the five-year period and not merely price control on the farmers' wheat, the farmers of western Canada would have been satisfied with the final settlement and would not need to press the government for a final payment of not less than twenty-five cents per bushel. I make one other statement; unless something is done to prevent the farmers' cost of production from rising in the future, when the international wheat agreement has finally run its course the western farmers will once again be asking the government for a compensatory payment because their costs were allowed to go sky-high at a time when wheat prices were frozen.
One has only to look at the index published by the dominion bureau of statistics to show that the farmers are losing because of this
960	HOUSE OF
Emergency Powers Act runaway inflation. The cost of living index *as it affects farm living costs is not kept up to date in the same way as the general cost of living index. The latest figures available for the farmers' cost of living index are for August, 1950. At that time the general cost of living index was 168-5, while the farmers' cost of living index was 180-7 or 12 points higher than the general cost of living index. If one looks further at the way inflation has affected the farmers' cost of production, one can see that the eleven-factor farm cost index published by the dominion bureau of statistics-


Mr. Gibson:: That has to do with production costs?


Hazen Robert Argue: Yes, that is right. It represents eleven main factors involved in production namely farm implements, building materials, gasoline, oil, feed, fertilizer, binder twine, seed, hardware, tax rates, interest rates and farm wages. In January, 1950, that index stood at 196-3, while in August, 1950, it stood at 215-4, an increase within that eight-month period of 19-1. There is no reason to believe that since August, 1950, the farmers' cost of production has not continued to rise. The wheat farmers, thus with a set price for their products and rising .costs, are finding themselves in a real squeeze.
I have a few figures here related to the increase in the cost of farm implements. These figures are the result of my own research, so if they are inaccurate-I do not believe they are-I shall accept the responsibility. The price of a John Deere model A tractor in Regina in 1945 was $1,338. The price of the same tractor in 1951 was $2,450. A Massey Harris self-propelled combine sold for $3,185 in 1945, and in 1951 for $5,105. There has been an increase in this all-important item in a farmer's cost of production of between 40 and 60 per cent between the years 1945 and 1951. These increases should not be allowed to continue. I standi up in this debate therefore, Mr. Speaker, to make the statement that the farmers from one end of Canada to the other would welcome over-all price control. I make a further statement that when the farmers are asking for over-all price controls, they do not mean a freeze. We do not want the price of eggs frozen at today's level in Saskatchewan, where one week ago a farmer was receiving 25 cents a dozen.. When I go home at Easter, I shall bring some eggs back because I am now paying 6 cents each or 72 cents per dozen in the local stores. Spring production on the prairies or something has hit the price of eggs, and the farmers are getting 25 cents a dozen at the local delivery point.


The farmers are not seeking to gouge every possible dollar out of the Canadian consumer. . They are not asking the very highest inflationary prices for each and every product they sell. At the same time they object to being forced from time to time to take prices that are unnecessarily low and below the cost of production. Hogs are a fairly good price today, it is true; but how many hogs are coming on the market across Canada? When hogs were going on the market last fall in quantity, the price was $27 or $28 a hundred. Today when the farmer has no hogs to sell the price is $34 a hundred. The same thing applies to eggs. When the farmer has no eggs to sell, the price is sky-high; and just as soon as the hens begin to lay, down goes the price. In the province of Saskatchewan, this great floor price we have lets the price of eggs drop to 25 cents a dozen to the farmer.
Our farmers want parity prices. I had- in my office yesterday a sizeable rancher from Willow Bunch. He told me that he was wintering now 140 head of Hereford cattle. I said to him: "The price is good for cattle now, is it?" He said: "Yes, it is exceptionally good". "But," he said, "I think the price of cattle is too high for the good of the livestock industry". He said: "As an industry, we would be prepared to accept a parity price for cattle if that parity price would be guaranteed over a period of years". He further said to me that he thought that increased stability would be worth a great deal to the farmers and that perhaps if parity prices were applied to all farm products, it might mean a somewhat lower price at this time; but, it would mean stability and a better price for beef in the years to come.
The Saskatchewan Farmers Union, with a membership of 30,000, in convention in Saskatoon in December of last year, passed the following resolution in reference to price control:
Whereas we, the members of the Farmers' Union, view with alarm the general economic trend wherein, prices in general are sure to be increased, and are convinced that security lies in price control: Therefore be it resolved that we demand that the federal government put price controls in effect at a point comparable with farm prices.
The demand amongst the farmers for price controls, in my opinion, does not lie in ny one province. As a matter of fact, I think the farmers in every province of Canada have much to gain through a price-control system which is applied equitably and which will guarantee them reasonable prices based on parity year in and year out. The last issue of the Rural Co-operator has in it an article from which I should like to quote and which proves that the farmers of Canada are

demanding price control at this time. The article is headed "Forums approve of Price Controls", and has this to say:
That Canada should have price control of all essential commodities during the current international crisis, was the opinion expressed by 84 per cent of the farm forum groups in a recent national farm radio forum poll.
Here is the question that the farm forums were asked to discuss:
It has been suggested that in the current international crisis, we should have price control of all essential commodities. What do you think?
Here are the percentages of replies for and against, from the 1,033 farm forum listening groups: For price control, 84 per cent; opposed to price control, 8 per cent; uncertain or divided in opinion, 4 per cent; no answer, 4 per cent.
Here, Mr. Speaker, in my opinion is a consensus amongst farmers in Canada from one end of the country to the other which clearly demonstrates that farmers, by a majority of more than ten to one, are supporting price controls at this time. We know the people in urban areas, people on fixed incomes, and industrial workers are demanding price control. I believe that, in conjunction with the labour unions, to those groups in our nation on fixed incomes-such as old age pensioners, persons living on a mother's allowance, et cetera-must be added the great mass of Canadian farmers who also are demanding price control. The fact is that the whole Canadian nation is calling on the government to implement price control. In a democracy such as we have, Mr. Speaker, at this time of crisis, I believe this government would be doing the responsible thing if it brought in price controls immediately and thus protect the living standards of all Canadians.


Donald Methuen Fleming: Mr. Speaker, I had not assumed that there would be another debate on the subject of price control today. I should just like to offer briefly some views on this subject, in view of the further attention it has received today and also in view of the courses of action which, in some of the speeches today, the government has been invited to take.
I yield to no member of this house in my alarm over the threatening dangers of inflation. I do not think that inflation is something off in the distance. It is a condition that we have right now. The people from one end of this country to the other are feeling the distressing effects of it. I am far from thinking that that cycle of inflation has run its course.
When I spoke in the house on February 20 I made it clear that I am certainly not one of those who believe that there are no 8070&-61
Emergency Powers Act measures that lie within the power of the government to take in order to meet the dangers of inflation. I think that there are many steps that the government can take to meet this overwhelming danger of inflation.
I wish to make an observation directly related to this emergency powers bill. Even if the government took the steps that it is being invited to take under this bill, I do not think that those steps would be nearly as effective in meeting the common danger of inflation and the soaring cost of living as measures that the government can take quite apart from this bill and could have taken before this bill was ever introduced into this house.
I have mentioned some of those steps before. There is the failure of the government to exercise the powers that it possesses under the Bank of Canada Act to control credit; and when you have regard to the tremendous increase in loans in this country as a result of too-free credit, I think this is some yardstick with which to measure the extent to which inflation has been allowed to increase, by leaps and bounds, while the government has sat back and has not taken steps in that direction which were open to it to take under powers that it already possessed and has possessed for many years.
The second failure of the government, of course, is not only the way in which it has refrained from any contraction of the money supply in this country, but the way in which it has actually increased the money supply at a time when inflation was leaping ahead at a rate more rapid than ever before in our history. Also there are various other measures to which I referred when I spoke on February 20, Mr. Speaker, which are within the power of this government to take directly to counter the influence of inflationary factors at work in our economy today, which they do not need this present bill to take, and never have needed the powers under it to meet that very great danger.
Essentially, of course, the problem of inflation will have to be battled on many fronts. There will have to be an increase in production, because that will create more goods to meet the demands; and there will have to be, whether we like it or not- especially moving nearer now when more and more of the resources of this country must be directed to preparation for defence -a measure of consumer restraint, which will call for the exercise of a sense of personal responsibility on the part of every citizen in this country. That is one direction in which I think the government has been

Emergency Powers Act subject was discussed in the early days of the session. I think it has become apparent in the admissions made by the protagonists of the program of over-all price controls that the success of such a program would involve an immediate freeze, and after that, perhaps, a very substantial measure of direct control over wages and salaries. Now, to make it abundantly clear -


Stanley Howard Knowles: Omit the "freeze".


Donald Methuen Fleming: My hon. friend of the C.C.F. says "omit the freeze". I quite agree that my hon. friend from Rosetown-Biggar (Mr. Cold-well) and the hon. member for Winnipeg North Centre (Mr. Knowles) have not said that you would have to impose a freeze upon wages and salaries to make a system of overall price controls effective. But what I am saying is that if we approach this subject with candour we will have to concede that the first step would have to be a freeze. You might not have to continue it, on the argument put forward by my hon. friends of the C.C.F.; but even on their argument it is conceded that a very substantial and, I venture to say, rigorous measure of control would have to be applied, even though you might ease the initial freeze on wages and salaries.
For myself I wish to make it as clear as I can that I am opposed to any freeze on wages and any freeze on salaries under present conditions or anything approaching present conditions. I wish to say further that, if it becomes a question of differentiating between a freeze and a substantial measure of control over wages and salaries, I am opposed under present conditions or conditions approaching present conditions to that rigorous control over salaries and wages which it seems to me my friends admit, or must admit, would be essential if any system of over-all price controls were to be attempted, in the hope of being made effective.
Either that rigorous control or that freeze, it seems to me, would have the effect of perpetuating many serious inequalities that exist today. In the field of wages there are all kinds of inequalities. So I come to one of the inherent weaknesses of this doctrinaire approach of laying down a flat program to meet present conditions. Present conditions are not so simple that they admit of any one simple expedient to meet them. The situation that parliament and the government face is infinitely complex, and you cannot meet it by introducing a simple program of overall price control such as has been advanced during this debate. Life is not constituted along simple lines like that. This whole complex structure that we call the Canadian economy is not constructed in as simple a way as that. Economic forces at work within that


widespread economy cannot be re-directed by measures as simple as that.
I have said something about wages. I wish to say something about salaries because I represent a great many white-collar workers. Broadly speaking, those white-collar workers have not had the advantage of the advancement in the returns that they receive from their hard labour that has attended the efforts of many wage earners to advance their position, both in respect of wages and working conditions, largely through the beneficent operations of collective bargaining through their labour organizations. The white-collar workers have not had that advantage, and as compared with many wage earners in this country who have had the advantage of collective bargaining and collective action their lot is worse, comparatively speaking.
To think today of imposing measures that would at the very least involve substantial and rigorous control of salaries would be, it seems to me, perpetrating a great injustice on tens of thousands of white-collar workers in this country. I for one am not prepared under present conditions, or under anything approaching present conditions, to subscribe to measures of rigorous control of the salaries of these white-collar workers, nor of the wages of wage earners. I am of the opinion that rigorous measures of that kind will do nothing but perpetrate inequities, exaggerate injustices that presently exist and create a measure of discontent that might easily approach a state of turmoil.
There is one other factor that I cannot forbear mentioning. I do not represent a rural constituency but I did have some experience with farm labour when I was a little younger.


Jean-François Pouliot: The hon. member has had experience in every field.


Donald Methuen Fleming: No, I do not say every field, but I do mention the fact I have just referred to because I do not think every city dweller is as far removed from concern over the welfare of the farmer as perhaps some people are at times disposed to assume. We are told that the farmers of Canada want over-all price control. I do not doubt for a minute that many farmers would like to see the prices of many things controlled. I suppose every one of us if he gets down and talks from his heart of hearts will say, "Yes, I would love to see the prices of the things I have to buy controlled, not at the present high levels but to be rolled back. I would want to see them controlled at a very low level. But when it comes to things I have to sell, I do not want control."
At the very time that some hon. members in this house were speaking along those very lines I recall that representatives of the

Canadian Federation of Agriculture were before the government-just a fortnight ago- asking, not that the prices of farm produce should be frozen at present levels but should be increased. According to press reports the federation was asking for an increase in the price of domestic wheat; next, for the raising of the butter floor price and, next, for an increase in the floor price of bacon.
Let me make it quite clear-I think I can claim to be consistent in what I am saying- that I do not believe in freezing the returns which the wage earner is entitled to expect from his labour. Neither do I believe under present conditions in freezing the return to the white-collar worker for his labour. Similarly I do not believe that the returns to which the farmer is justly entitled as a fruit of his toil should be frozen. If you are going to start meddling with the forces of nature and the laws of economy then it seems to me that you must start here or there, and where will you draw the line? If you start with partial measures then of course you are going to create inequities, and every step you take will call for another in order to meet the inequities resulting from the last step.
The situation is just that, and I am afraid there is no escaping from it. If you are going to deal with it you have to go the whole way and clamp the tightest imaginable controls on the whole economy. I do not believe that the people of Canada are going to submit to the clamping of tight, rigid controls on the operations of the whole Canadian economy.
As one who has inveighed, I hope consistently, in the eight or nine sessions it has been my privilege to be a member, against the dangers of bureaucracy, I want to warn hon. members that the adoption of an overall rigid system will involve the re-establishment in this country of a bureaucracy that would be bigger than anything we have seen as yet, and which would take some time to put together.
We are not without recent experience as to the wisdom of the type of measures the government has been invited in certain quarters to take. Only several weeks ago the protagonists for the imposition of over-all price controls were pointing to the United States. They were saying that, as the United States had come to it, Canada must come to it. We have had more recent experience on this continent since those broad assertions were made.
The experience in the United States during the last month has been one of progressive decontrol, and the rate of progression
Emergency Powers Act has been rapid indeed. I saw figures the other day indicating that since the original freeze was put on a matter of five weeks ago some 200,000 articles have been removed from the effects of price control. It seems to me that anybody who can see in what is happening in the United States today a vindication of the argument that over-all price controls would be effective under present conditions, or under anything approaching present conditions, is simply closing his eyes to the facts as they have been unfolding themselves day by day in the United States.
Let me just say in conclusion that I concede at once the sincerity of my hon. friends of the C.C.F. in putting forth as they have year by year the same arguments as they are putting forward now. I will give them credit for consistency. Personally I think they have been consistently wrong, but I do give them credit for consistency. They can be consistent on this subject for a very obvious reason. As we Progressive Conservatives have been saying throughout recent years, the idea of control by the government over the economy of the country, of which price control with all its concomitant	controls is a leading
example, is	a	part	of	the mechanism ofsocialism. It	is	not	the	only mechanism ofsocialism. It	is	not	the	only expedient that
will characterize socialism in this country if such a time ever came when the people decided that they wanted socialism, but I say that this is one of the characteristics that will always attend socialism.
Therefore, believing as I do in the system of free enterprise, I do not approach this question at all with the same ideas as the socialists. They can afford to be consistent on this subject. For my part I choose to be consistent also in my opposition to the sort of things that they have been and are still advocating. I was not elected as a socialist, and it is no part of my business here, holding the views that I honestly hold, to try to out-C.C.F. the C.C.F.


Mr. Sinclair:: How did you vote on price control?


Donald Methuen Fleming: How did I vote?


James Sinclair: Yes.


Donald Methuen Fleming: You will not find my vote recorded on the C.C.F. amendment.


James Sinclair: You will not find it recorded, period.


Donald Methuen Fleming: When the C.C.F. brought in 'heir amendment two weeks ago I did not vote. No vote of mine in this house has been given to any doctrinaire subscription to what I think to be a program which will not work under present conditions. I do not say that

Emergency Powers Act the time will not come. I made that clear. I said that the system would work if we are faced with total war, if we are faced with more imminent aggression. Then we will unquestionably have to accept a greater measure of control over the economy.


Major James William Coldwell: Socialism to win a war.


Donald Methuen Fleming: It is not socialism at all. It is a matter of submitting, in the face of an emergency, to a form of control which I think the people will accept under conditions of total war, and I have no evidence that they are prepared to accept it under present conditions. There is an abundance of evidence to show that it will not work effectively unless there is almost unanimous support for it throughout the length and breadth of Canada. I do not want to see a system of that kind attempted to be imposed unless it is going to work, because if it were imposed and failed to work you would see a situation under which blackmarketing, as we saw it under the previous system, would simply pale away into insignificance alongside the extent of blackmarketing that would prevail under such conditions.
I have sought to be consistent. I have grave distaste for subscribing in any doctrinaire or dogmatic way to general programs that it seems to me assume a great deal. I think I have been thoroughly consistent in urging that parliament has no right, short of compelling necessity, to be giving to the cabinet extraordinary powers to do, while parliament is in session, things that parliament can do. Therefore it is with no enthusiasm, you may be sure, that I have seen this present measure, the emergency powers bill, accepted in the house, and have seen people urging upon the government that they not only accept these powers but go forward and use them at once and in a drastic form.
As long as this parliament is in session, as long as it is a free and sovereign parliament, I want to see it retain the right and function of taking those steps in the public interest that commend themselves to parliament as being necessary in that interest. I do not want to see parliament hand over such powers to any group of men no matter who they are. I do not care whether you have confidence in the government or whether you have not. I think it is inherently wrong, short of a condition of compelling necessity, for parliament to be handing over vast powers to the government to do, while parliament is in session, things that parliament is quite capable of doing.
Therefore I am not one of those who are telling the government to take these powers and to go rip-roaring ahead and use them. Rather I say to the government that I deplore
fMr. Fleming.)
the fact that they have come to parliament to claim, under this and other measures currently before the house, powers at the expense of parliament which I do not think parliament ought to be handing over to any government or any minister. While parliament is in session I want to see it retaining control of these situations, retaining the right to do the things that this supreme and sovereign parliament considers necessary in the public interest.


Jean-François Pouliot: Mr. Speaker, I do not want to make a long speech. I have listened' with great attention to the one just delivered by the hon. member for Eglinton (Mr. Fleming). He said to us that he is not a doctrinaire. He may be right. He told us that he was against control of wages. That is his own view, but what was missing in his speech was a conclusion that one could accept. I am satisfied that he realizes the complexity of controls. He is gifted enough to understand that it is one of the most difficult questions to handle. But if the Prime Minister (Mr. St. Laurent) has listened to his speech as I have-and I am sure that he has-I wonder what benefit he has derived from the bright speech made by my hon. friend? What is the conclusion? Will we vote for or against the bill? What will he do? Will he vote for it? Will he vote against it? What is his conclusion?
After the enunciation of all the pros and cons of the necessities of the problem we are still faced with a bill to permit the government to impose controls at some future date when the government realizes that it is time to do so. The hon. member has said that now is not the time to impose controls. He agrees with the government on that point. The time will come when it will be a necessity, and not only a necessity but a possibility. I am sure that the government will then act to the satisfaction of the hon. member for Eglinton.


Donald Methuen Fleming: Will the hon. member permit a question?


Jean-François Pouliot: Yes.


Donald Methuen Fleming: If parliament is in session when that time comes, will parliament then not be in a position to act swiftly to meet that emergency? The hon. member will bear in mind that I made a complete reservation with respect to the time that parliament is in session. I do not say that legislation of this kind should not be left on the statute books when parliament prorogues. I am speaking of the time when parliament is in session,


Jean-François Pouliot: If I am permitted, Mr. Speaker, I will answer at nine o'clock.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.


Mr. H. W. Winkler (Lisgar) moved: that the following bills be read the second time:
Bill	No.	103,	for	the	relief	of	Eileen
McDermott McRandall.-Mr. Winkler.
Bill No. 104, for the relief of Laurice Mary Michel Shatilla.-Mr. Winkler.
Bill	No.	105,	for	the	relief	of	Mihaly
Kovacs.-Mr. Winkler.
Bill No. 106, for the relief of Rebecca Gli-cofsky Brown.-Mr. Winkler.
Bill	No.	107,	for	the	relief	of	Selma
Rokowsky Kirzner.-Mr. Winkler.
Bill No. 108, for the relief of Ferdinand Langlois.-Mr. Weir.
Bill No. 109, for the relief of Violet Edith Macdonald Harris.-Mr. Winkler.
Bill No. 110, for the relief of Frangoise Brunet Crassowski.-Mr. Winkler.
Bill No. Ill, for the relief of Emily Rita Rowlands Simpson.-Mr. Winkler.
Bill No. 112, for the relief of Ivy Lucas Levitt.-Mr. Winkler.
Bill No. 113, for the relief of Marguerite Marie Rita Fournier Cook.-Mr. Winkler.
Bill No. 114, for the relief of Paul Emile Piuze.-Mr. Winkler.


Mr. Speaker:: Is it the pleasure of the house to adopt the motion?


An hon. Member:: On division.


Mr. Speaker:: Carried on division.
Motion agreed to on division and bills read the second time.



TRANS MOUNTAIN OIL PIPE LINE COMPANY

Mr. Arthur Laing (Vancouver South) moved: the second reading of Bill No. 115, to incorporate Trans Mountain Oil Pipe Line Company.


Mr. Green:: Could we have an explanation?


Arthur Laing: Mr. Speaker, this is an act to incorporate Trans Mountain Oil Pipe Line Company. The purpose of this company is to build an oil pipe line from the city of Edmonton in the province of Alberta to the city of Vancouver in the province of British Columbia via the Yellowhead pass. The proposed route is an all-Canadian route, and the pipe line will terminate in the city of Vancouver. It is proposed to build a pipe line of twenty-four-inch diameter which initially will carry oil at the rate of 75,000 barrels daily. The capacity may be increased by pumping pressure to an estimated 200,000 barrels per day. Marine terminal and storage
Private Bills
tanks will be built in the port of Vancouver for the shipment of that part of the oil delivered to that port which cannot be consumed in the province of British Columbia.
Important additions and extensive new refinery facilties can be envisaged as a result of the construction of this pipe line. I believe the members of this house would like to be assured that this is no frivolous application. It is not a proposal which suggests promotional aspects. The company that will build this line will be set up in Canada, and financed in Canada. The parent company is the Bechtel Corporation of San Francisco, the greatest pipe line building organization in the world today. One of the early achievements of this firm was the construction of the Hoover dam many years ago in cooperation with another group of contractors. For those who would care to study it, the history of this company was given great prominence in a lead article in Fortune magazine for the month of February. The Bechtel Corporation has over seven hundred engineers, and over five thousand offshore employees working on engineering projects in every part of the world. It has just completed a huge trans-Arabian pipe line-tap line as it is called. It has constructed a huge pipe line for the Pacific Gas and Electric Company from the state of Texas to the state of California, a distance somewhat in excess of 500 miles. Last year it completed in the Dominion of Canada 450 miles of our interprovincial pipe line. It now has under construction a thirty-two-inch pipe line from Kirkuk, in Iraq, across the Syrian desert, and the high Lebanon mountains to Banias on the Mediterranean sea.
Canadian contractors and Canadian materials will be used so far as possible. The total steel requirements, and this is a matter of major importance, have been arranged for, and construction is planned to begin in June of this year. It will be completed by the end of 1952. Associated with the Bechtel Corporation will be the oil companies supplying the oil which will flow through the pipe lines. Assurances have been received from the major oil producers that they will use this line to transport their products to the Pacific coast.
I should like to supply a few figures concerning consumption within the area that can reasonably be served by this pipe line when it is completed. The consumption of petroleum in British Columbia today is approximately 44,000 barrels per day. The state of Oregon, which is accessible to such a line, consumes 104,000 barrels per day. The state 'of Washington, which is easily accessible, consumes 130,000 barrels per day.

Trans Mountain Oil Pipe Line The northern portion of the state of Idaho, which is the only portion which would be available to such a line, consumes something in the nature of 3,200 barrels per day. Shipment of the oil to Vancouver via this pipe line would mean additional revenue to Canada in 1953 of $50 million per year. Today on the Pacific coast we are spending our extremely precious United States dollars for petroleum products from the United States or South American countries which require United States exchange. This indicates that the saving to Canada would be very great, and it would increase in the ratio I indicated at the start as the volume of oil passing through the pipe line increases. To the British Columbian this is a distinct opportunity.
I am not without some knowledge of the economy of our province of British Columbia. I am going to say that nothing would serve us better than an integration of the economy of British Columbia with the economy of our neighbour to the east. We have a great many complementary products. I am going to say to my friends opposite, who sometimes have indicated this is a one-way traffic, that that is not the case. I would ask them to bear in mind that the people of British Columbia today obtain seventy per cent of the beef they consume from Alberta. Last year we brought in 930 carloads of Alberta potatoes. Of all the butter that we consume, eighty-two per cent comes from the province of Alberta. At the present time it may be interesting to note that we are consuming their eggs at the rate of $65,000 per week. If we could overcome the disadvantage of the great ribs of the Rocky range and could integrate our economies a little bit more closely, it would be of tremendous advantage to my province of British Columbia and, I am certain, to the province of Alberta as well.


Mr. Blackmore:: You are talking good sense now.


Arthur Laing: I want to indicate, if I may, some of the factors of production in the province of Alberta. I think we as Canadians too often overlook-and foreigners are not overlooking them today-the tremendous resources that exist in the province of Alberta. I think it could be well brought home to us that we have there resources that, if properly used, can be one of the great factors, if not the greatest, in the continuing prosperity and welfare of this nation. The figures I have are made available by the Stanford Research Institute which has done a great deal of work in the province of Alberta.	Incidentally, I think this is
a matter which could well go on the 

record of this house. I am informed by them or through them that the information they have obtained is most excellent, and that the officials and scientists employed by the province of Alberta and by the board in Alberta which is responsible for the maintenance of reserves there are of a nature of intelligence and foresight second to none among those with whom they have had to deal in any country in the world.
At the present time, effective January, 1951, the recoverable reserves of petroleum in the province of Alberta are of the nature of 1,250 million barrels of oil. That is the recoverable reserve, not the total reserve. The total reserve, based: upon 100 per cent, would be of the nature of 100 over 42 times this figure, because the recoverable reserve in Alberta averages out at 42 per cent of the total reserve. They vary from district to district from 25 per cent to 50 per cent, but on the average geologists are working on the assumption that the recoverable reserve is of the nature of 42 per cent of the total oil found in the ground. Accessions-that is, new discoveries-have been worked at the rate of 300 million barrels annually. So that we in that great province are finding additional oil to the extent of 300 million barrels annually of recoverable oil. If we project that into the future, we shall have in a few years a great increase in the recoverable oil from that area. It has been estimated that by January 1, 1953, there will be a recoverable reserve of 1,672 million barrels, notwithstanding the contemplated withdrawals, including the withdrawal taken out by this pipe line. So that we have in that area a tremendous value of oil.
I want to say a word or two, Mr. Speaker, concerning the importance of oil at the present time. We in the western democracies are faced with a tremendous threat to our institutions and indeed to our very lives. Of all of the aspects of defence, there is no greater strategy than the strategy of oil; because in our contemporary age, oil is power. In peacetime it is power to develop new industries, and power to transport people by land, by sea and by air. In wartime it is a vital necessity beyond any calculation. One-third of all the world's known reserves of oil lie within the United States. That is a most reassuring picture, but when you look at it more closely you find that the picture is not as reassuring as it seems at first blush. The estimated domestic production in 1949 was of the nature of 1,840 million barrels of oil; but this oil was drawn from 449,000 oil wells. The production worked out at 11 barrels per day only, which indicates that many of the United States wells are old, that they are over-exploited and that they are rapidly declining in production. Venezuela, which

had in 1949 a production of 457 million barrels of oil, produced that great quantity from 6,326 wells or an average of 201 barrels per day. The Middle East, which is one of the vital sources of oil at the present time, produced 512 million barrels of oil from only 208 wells, or a production of the nature of 5,500 barrels per well per day. When we give some thought to these figures we realize that we have an expendable reserve on this continent good for peacetime for twenty years. But when we say that we can foresee for that many years to come the requirements of oil in a peacetime economy, the picture is entirely changed if we think of war. If we could look forward to an assured period of peace, we would know what our oil would do. But under war conditions, when our safety and our security is threatened, there is simply no limit to be placed upon the immediate requirements of oil.
I was interested in seeing in the January issue of Foreign Affairs American Quarterly, attributed to a man by the name of Halford L. Hoskins, this most interesting extract:
Except for the promise of young Canadian fields, the outlook for long continued production in the fields certain to be available in time of emergency would be dim.
This again is a tremendous tribute to the resources which we have in the great province of Alberta. During the war, between 1940 and 1945, consumption of oil increased within the United States by the stupendous amount of 100 million barrels annually. Consumption in 1950 approximated 6,500,000 barrels of oil per day in the United States, which is, phenomenally speaking, two-thirds of the entire world production of oil.
The Middle East oil fields, which are today producing oil at the rate of 1,800,000 barrels per day for western Europe, are strategically extremely vulnerable. This oil is now going to western Europe and the wells are in a hazardous position by location. Transport is in an extremely hazardous position. As to oil, our security rests, to an uncomfortably large extent, upon ready supplies of oil. This proposed pipe line would take care of an eventuality where, through impairment of Middle East oil facilities, we could have Venezuela oil and California oil immediately drawn to Europe and could well be left without oil. It will provide an extremely valuable market for the growing production of the great province of Alberta. It will greatly increase the move toward1 the integration of the economy of our two great western provinces. We have heard lately in the house some discussion about distribution of industries across the country, and so on, and the necessity of bringing all parts of the country along. As a westerner I have felt that we 80709-62
Trans Mountain Oil Pipe Line always like to think at least the great flanks of the country should be brought along economically with the same measure of progress as the central provinces. I think that the integration of the economy of our two most westerly provinces by the construction of such a pipe line as this would ensure that the western flank of this country would have prosperity for many years to come.
If the hon. member for Winnipeg North Centre (Mr. Knowles) is, as he was called yesterday, a sea lawyer, then I must say that I am probably a salt water petroleum engineer. In the short time that I have been endeavouring to study this question of oil I have found that it is the most engrossing story I have ever attempted to study. There are vast ramifications about it, and I could not hope to answer technical questions, and I do not think that hon. members would ask me to; but I will endeavour to answer some of the simpler questions if any hon. member would like to ask any afterwards.
I do want to thank hon. gentlemen for the attention that they have given me in the presentation of a project which I think ranks with the greatest projects in the Dominion of Canada at the present time.


Mr. John Decore (Vegreville):: Mr. Speaker, I should like to make a few brief remarks with reference to this bill. First of all may I congratulate the hon. member for Vancouver South (Mr. Laing) on the very able manner in which he has presented his case.
As one of those who come from the province of Alberta may I say that this bill is important to us in that province for two reasons. First of all, we in that province are concerned in finding an outlet for our oil production. Every day new wells are being discovered, and every so often new fields are also being found. Therefore, it is important to us that we have an outlet for this oil or some outlet whereby we can dispose of it for marketing purposes.
This particular pipe line itself will not solve the problem. We need more pipe lines and immediately; that is why I should like to see this project go through.
The other reason is that I notice that this pipe line will go through the Yellowhead route. That is important, because it will tend toward the development of that particular area. It will certainly mean the construction of a better road. We have a road going through that pass now, but it will mean a better road in order to construct and maintain this pipe line. For that reason, Mr. Speaker, I am supporting this bill.


Mr, G. A. Cruickshank (Fraser Valley):: I should like to congratulate the hon. member

Trans Mountain Oil Pipe Line for Vancouver South (Mr. Laing) on the excellent manner in which he has presented his argument.


An hon. Member:: Louder.


Mr. Cruickshank:: I am just warming up. I had not intended to take part in this debate but in the debate on the pipe lines that will follow this bill.
The only objection I have to the newspapers is that sometimes they are unkind. In most instances they are kind, but one group of newspapers says that I shout, and another says that I roar.


John Lambert Gibson: Do you ever say anything?


George Alexander Cruickshank: Wait until we get to the other pipe line that is to follow. May I say to my hon. friend who asked if I ever said anything that he will realize I have to say very little to contribute more than he ever did.


Some hon. Members:: Oh, oh.


John Lambert Gibson: I will retire.


George Alexander Cruickshank: I think you had better.
In the past we have been accused of carrying on a filibuster in the house on pipe lines.


An hon. Member:: Who said that?


George Alexander Cruickshank: Those of us who took a certain line of action in regard to pipe lines were accused of carrying on a filibuster. I think some of my colleagues, at least some of them from British Columbia, do not object to being accused of carrying on a filibuster. Look at what we have gained already. I am sure that the people of the Fraser Valley riding are delighted to know that my hon. friend has introduced a bill which says that a company is going to put a pipe line through Canada, and that it will run to the city of Vancouver through the centre of the Fraser valley. I only wish we had had a little more support last year from some of the hon. members on the other side, but we are gradually winning them over. At last they have come to realize the great potentialities that we have in our own great province of British Columbia.
I remember that last year the hon. member for Nanaimo (Mr. Pearkes) mentioned defence in connection with pipe lines. He was more or less scoffed at. I am glad that my colleague mentioned the great value that oil has as a defence measure, particularly at this time.
As I said, I do not want to take up too much time on this bill, but lest there be any misapprehension on the part of some of my hon. friends in the opposite corner, or in any other corner of the house, may I say that


when the appropriate pipe line bill comes before the house I shall have plenty to say, particularly now that I know I have a champion to my right to assist me, in that he is committed to an all-Canadian route. I am looking to the eloquence of the hon. member for Vancouver South to assist me, and any who join with me, in seeing that no other pipe line is permitted to be built through the United States and in through the back door to the finest city in Canada, namely, Vancouver. I will even enjoy the assistance of those who are not as eloquent as the hon. member for Vancouver South.
This is of vital importance to us. Just before I came down to the chamber tonight I discovered that another application from Montreal for a pipe line was advertised in the newspapers. I shall have more to say about that in a few days. You know, if we get all of these through we will have a pipe line charter for every oil well that comes in in that great province of Alberta.
We in the west, and particularly in British Columbia, joined by the province of Alberta and even slightly assisted by Saskatchewan, built the great county of Bruce in Ontario and look to you to assist us in building an all-Canadian route.
I know that other hon. members are going to speak on this bill. I shall have a good deal to say on another bill, which is also being introduced by an hon. member from British Columbia, with which I am not entirely in accord. It may come up later tonight.
The hon. member for Vancouver South invited questions, and I think fairly so. There are one or two questions that I should like to ask. I am sure that no hon. member in this house wants these charters granted merely for promotional purposes. I am not suggesting that for one minute. The hon. member for Vancouver South said that his company is closely connected with the Bechtel interests and some of the oil companies. I presume that means Imperial Oil Company, which is the largest concern in Canada. What I am getting at is-


Some hon. Members:: Carried.


George Alexander Cruickshank: Some hon. members are saying "carried". May I tell the hon. members who want to develop the United States that the longer they shout "carried" the longer it will take.
I presume that the oil companies will assist in the financing. If that is so, I think it is an excellent move. If that means the Imperial Oil Company, it means one of the strongest companies in Canada. Is that correct? There is another thing I should like to have clear in my own mind, and I am sure the hon.

member will want to explain it to me. He said that construction of the pipe line was beginning in June. My understanding is that, no matter what company it is or what line it is, the board of transport commissioners must give its approval before any work can commence. I do not know if my hon. friend has entree to the board of transport commissioners that is not enjoyed by any other company but I shall be glad to know if he has, and to know that work will begin in June. I am asking him to explain that to me.
Then the hon. member said steel was available. It has been my understanding that we have had a bill going through the house for some considerable time-it is not through yet-that will control steel. Therefore when my hon. friend makes the statement that steel is available I presume he must have information that that is so. I am not quarrelling with him, but I should like him to make clear his knowledge as to what the steel situation is. I want to have it clear in my mind as to whether steel is in fact available. I should also like to have clear what assurance there is that work can be commenced in June.
Let me repeat that this line goes right through the centre of Fraser Valley, the finest riding in Canada. Unfortunately it does not go through the Cruickshank farm; I should like to sell some right-of-way if it did.
That is all I have to say. I believe I have been fair. I am not trying to delay passage of the bill; I am anxious that it should receive a reading tonight. But as one who has been active in the house in connection with pipe lines, and who has been accused of supporting a filibuster-and that filibuster is beginning to pay off in dividends for our great Pacific province-I have no apology whatsoever to make.
I would appreciate it if the hon. member would give me the information I have asked.


Howard Charles Green: Mr. Speaker, I do not wish to prevent the hon. member for Vancouver South (Mr. Laing) from answering the questions. No doubt he will do so when he speaks closing the debate.
In rising to support the bill I would point out to hon. members that there is an important issue at stake in the bill, and at this session-because there are other bills coming up. The issue is this: I think it is admitted that there is only a market in British Columbia, Washington and Oregon for the oil that can be piped from Alberta by one pipe line. That was realized last year when we were debating the gas bill. Will this oil pipe line which is to go to the Pacific coast pass through Canada to a Canadian port and be refined in Canada by Canadians, or will it go mainly
80709-62a
Trans Mountain Oil Pipe Line through the United States to an American port where the oil will be refined by Americans? That is the issue at stake in the debates which will take place in the House of Commons on these oil pipe line bills.
As the house knows, the hon. member for Fraser Valley (Mr. Cruickshank) and I believe firmly in having a Canadian line, just as we did last year. All of the work will be done in Canada. The oil will be refined in Canada and expansion will follow in British Columbia from the establishment of a refinery and from the reduction in price of gasoline and other petroleum products. There will be a surplus over and above the requirements of British Columbia, and of course our friends and neighbours in Washington and Oregon are welcome to that surplus. We may also be able to ship some of the oil or oil products abroad to other countries.
But this year, as last year, there are groups who are seeking to get permission to form companies to build pipe lines which will leave Canada at the first convenient point, and go into the state of Washington and on to the great American cities of Seattle and Portland, with only a stub line up to Vancouver. Possibly Vancouver and British Columbia would be served only by tankers-not even a stub line-although this is Canadian oil. We would certainly have to pay a higher price than if the oil were piped through an all-Canadian pipe line. It is very much to our advantage, and therefore to the advantage of the whole of Canada, to have this pipe line go through Canada rather than through the United States.
I realize that the bill now under consideration has the support of hon. members, but I urge that when the other bills are up for consideration they keep in mind the principle I have enunciated.


Mr. P. E. Wrighi (Melfort):: Mr. Speaker, I think one of the ways we could accomplish some of the suggestions offered by the hon. member for Vancouver-Quadra (Mr. Green) would be to have this line constructed through some agency of the Canadian government, such as the Canadian National Railways. Then we would have control of the oil and would be able to see that it would be refined in this country.
It would seem to me, judging by the number of groups who are coming forward and asking for charters to distribute the oil, that those people think there is a lot of money to be made in the distribution of oil in Canada. They are quite right, because experience in the United States has shown over the last number of years that the ownership of pipe lines in that country has been one of the most lucrative parts of the oil

Trans Mountain Oil Pipe Line business. Tremendous profits have been made from investments in oil lines in that country.
I am sure hon. members on all sides of the house agree today that there are certain things which should be owned publicly. I believe most people are agreed that power is a commodity which should be developed and distributed by a public body. In Ontario we have the hydroelectric commission, and in practically every province of Canada today the development of hydro is publicly owned.
This is just another form of power; and power is so important to our whole economy that I think the people of Canada, through their own agencies, such as the Canadian National Railways, should consider the building of this pipe line-because, make no mistake about it, there is going to be only one pipe line. One can transport all the oil that will ever be used at the Pacific coast. Would it not be much better to have that pipe line owned publicly than to have it owned to a great extent by American capital?
I have no particular objection to the investment of American capital in this country; nevertheless I think it is unfortunate that the people of Canada themselves should not control their own basic resources. The only group in Canada able today to develop and build a pipe line is the government. We should be developing that pipe line; it should be built by the government, through one of its own agencies.
I appreciate that this pipe line is to be built through Canada, and that that is to be preferred to a pipe line going through the United States and then, after that country has been supplied, coming back up to our western coast. However, the fact that it is being built in Canada is one more reason why a government agency should be constructing it. I am going to move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That this bill be not now read a second time but that further consideration thereof be deferred until this house has had an opportunity to record its opinion that consideration should be given to the construction and operation of pipe lines by a crown corporation, or by a public agency owned and controlled by the government of Canada.
A similar amendment was moved on November 25, 1949, by the hon. member for Cape Breton South (Mr. Gillis). We move this amendment again to express to this house and to the people of Canada that this group believe in public ownership of power and its distribution by government agencies.


Mr. Speaker:: I declare the amendment lost. Is the house ready for the question?


Mr. Herridge:: I beg leave to move the adjournment of the debate.
Motion agreed to and debate adjourned.


Mr. Speaker:: It being nine o'clock, the house will resume the business interrupted at six o'clock.



EMERGENCY POWERS ACT


[Stage Direction]
The house resumed consideration of the motion of Mr. St. Laurent for the third reading of Bill No. 24, to confer certain emergency powers upon the governor in council.
Jean-François Pouliot: Mr. Speaker, I have a few words to say in answer to what has been said by the hon. member for Eglinton (Mr. Fleming). I listened to him very carefully and believe it or not, Mr. Speaker, I sincerely congratulate him upon his courageous speech. He represents, as he says, a large number of white-collar men. He has expressed himself forcibly in an effort to expose propaganda to which the members of parliament have been subjected, especially since the beginning of the session. In principle, I believe the same as he does about controls. I do not favour controls except in particular circumstances such as those which exist at this moment. In the first line of the bill we find the following:
Whereas an international emergency exists that threatens the security of Canada.
Emergency Powers Act
No one has denied the existence of such an emergency. There are high prices today. The purpose of this bill is not only to establish controls but to prepare this country for its defence. In that connection, and to answer the question put by the hon. gentleman, I believe that defence preparations in this country must start right now, so that we will not be caught by surprise if there is an enemy attack on Canada. It is for this reason that, although I am quite reluctant to do so, I will support the legislation which is now before the house.
I wonder what steps will be taken to improve the situation, and to establish a certain amount of control. What has happened in the United States can hardly be an inspiration for us. Government in this country is, I should say, better than it is across the boundary. It is easier to take control of a situation, even one which is as difficult as the one we now face. It is my sincere belief, sir, that we are facing an organized panic by reason of the well-known theory of Karl Marx concerning the struggle of the social classes. The propaganda must have been instigated by the same group of individuals who want to destroy the social standards of this country, and who take every means .at their disposal to create disorder. This is one of the main principles of communism. Certainly, there are some people who do not realize the extent to which they are agents of disorder when they try to create agitation, especially in difficult cir-prices are not too high. It is evident that cumstances.
I will not say that, for instance, food prices are not too high. It is evident that they are high. If one goes to the butcher or the grocer and sees the amount that is requested for food-well, he returns with an empty bag or buys a small quantity. It is well known. On the other hand, sir, how is it that not only every day but several times each day we have announcements in the newscast over the radio that the price of living is rising. Sometimes it has risen by a decimal, and sometimes by a point and a decimal. The figures may be accurate or otherwise. I cannot calculate the percentages in the cost of living index. I wonder how many people are employed in the dominion bureau of statistics to make that sort of propaganda throughout the country, and to give such a news item to the press agencies and to the radio networks of this country? If one says to a person, "How are you? You do not look very well", immediately the other fellow will feel badly. When we know that the price we have to pay for everything, for clothes and for food, is high,

Emergency Powers Act what good is it to repeat that tact to the Canadian people three times a day? I will ask the government to take measures to fire all those fellows who make such calculations in the bureau of statistics. They are agents of Moscow, if not deliberately at least unwittingly. It is a part of a scheme to create trouble in the minds of the Canadian people when they have enough to worry about as it is.
Some hon. members may find it unbelievable, but it is my deep conviction that this is one instance of the propaganda that is being issued in this country to destroy the confidence of the Canadian people in our institutions. The conclusion at which they will necessarily arrive is that parliament is good for nothing, because the members who are there cannot fix up such an important matter as the cost of living.


George Randolph Pearkes: Will the hon. member permit a question? Could not this department be screened?


Jean-François Pouliot: I agree with the hon. member that parliament is supreme, but parliament sometimes takes a long time to act. This matter has been discussed for several days, and the bill has not yet passed. We do not know what time the Senate will take to examine each provision of the bill with a magnifying glass. The hon. gentleman knows it. If the government is to get prepared for any emergency, let us start at once. The united front shall not be the front of the trade union leaders; it shall be the united front of parliament. Now that the members who differ from the government have expressed their views clearly, they must agree that, in virtue of one of the fundamental democratic principles, we must have the rule of the majority; we must abide by that. No supporter of any member who is doctrinaire will blame him for not having been diligent enough to expound his views here in the House of Commons on this matter.
It is my great pleasure to tell my hon. friends of all parties and groups in the house that they have made objective speeches and that they have spoken as faithful and welldeserving members of parliament. I will not say anything else at the moment. We shall hear from the Prime Minister (Mr. St. Laurent) who is sponsoring this measure. After he has spoken, I am sure that we shall have in this house the unanimity that has been mentioned by the hon. member for Eglinton (Mr. Fleming) and that there will be no more opposition to this measure.


Joseph William Noseworthy: Mr. Speaker, I shall not hold up the bill long,


nor do I propose to oppose it. As a matter of fact, I accept the Prime Minister's statement that the government has not now the necessary power to implement the controls which are necessary to meet the situation in which we find ourselves. We want parliament to grant that power to the government, and we want the government to use that power without delay in order to stop the rising cost of living. Whether the government chooses to use an over-all price freeze or, as the minister is reported to have said in a C.B.C. national broadcast, the government is considering a margin of profit control, or whatever other means the minister and his experts deem to be necessary to meet this emergency, we want those measures taken. Personally, I can see no great danger to our democratic institutions in the democratic procedure whereby parliament delegates power to the government and the government is responsible to parliament and to the country for its use of that power. The hon. member for Eglinton (Mr. Fleming) this afternoon seemed to imply that that is socialism. I suggest to him that that is democracy at work in an emergency.
I do not like controls for their own sake, any more than does the hon. member for Eglinton; nor do I particularly like policemen. But I realize that without them my freedom would be jeopardized by someone who insists on doing as he pleases. There is a great deal of talk about personal freedom and about freedom of enterprise. I submit that intelligent freedom must recognize the right of the other fellow to some degree of freedom at least. Desirable as it may be, from the standpoint of those who make profits, to permit profits to rise, to permit certain combines to boost prices, to stockpile mpterial and thereby create artificial scarcities, the ordinary people have a right to some protection by the government against those prices. I can see no danger to our democratic institutions in granting that power democratically, through parliament, to the government for its judicious exercise.
As to the hon. member for Eglinton-as a matter of fact, I doubt if I would have had anything to say at this time except for some of his remarks-I said in a previous debate on this subject that the hon. member for Eglinton succeeded in balancing himself fairly well on the price-control fence. After listening this evening to him as he related all of the things that he does not believe in, and hearing little of what he believes in, I think I can conclude that he has at least come off the fence with regard to price control. It must be most refreshing to the Globe and Mail to learn that there is at least one good Tory left

in Ottawa, one Tory who follows the old traditional Tory policy and is still optimistic enough to believe that he can vie with the Liberal party for the support of big business in this country. A few days ago he applied the term "omnipotent" to the Minister of Trade and Commerce (Mr. Howe) or suggested that he should be given omnipotent power.


Donald Methuen Fleming: Oh, wait a minute. Far be it from me, Mr. Speaker, to make any such suggestion. I did not suggest that the Minister of Trade and Commerce should be made omnipotent. What I did say was that the effect of the bill was to make him omnipotent; that it would have been just as simple for the bill to have said that in brief terms and let it go at that. That is a great deal of difference from what my hon. friend is now saying.


Joseph William Noseworthy: I accept the correction, Mr. Speaker. I understood the hon. member to say that the bill could be rewritten and that one clause in that bill should read: The minister shall be omnipotent.


Mr. Speaker:: Order. I think the hon. member is referring to a debate of the present session on another subject. If so it is not in order for him to do so.


Joseph William Noseworthy: As to the hon. member's speech this afternoon, I thought he gave a good deal of evidence of belief in his own omniscience. He states, for instance, that controls cannot now work; and the proof that they cannot work is the fact that the hon. member for Eglinton says so. He states that the people will not support controls; and the only authority we have for that statement is that the hon. member for Eglinton said so. There is considerable evidence that the people of Canada would support the government at this time in measures of control necessary to curb inflation. I have already pointed out, as has been pointed out by others in the house, that the trade unions of this country have indicated their readiness to go along with the government and to co-operate with the government in the application of such controls as are necessary.
It has already been pointed out that public opinion polls have indicated that a great majority of the people in Canada would support these necessary controls. I do not think the hon. member for Eglinton (Mr. Fleming) is giving the Canadian people credit for being very intelligent when he suggests that everybody would want controls on those things that did not affect them; the farmers and others would not want anything that they were producing or had for sale to be controlled. I think the Canadian people as a whole today see the seriousness of the situation and that they would readily support the
Emergency Powers Act government in the adoption of and in the
application of necessary controls.
One of the arguments that the hon. member used was that prices are now too high; that they are at an all-time high, and it is too late to try to impose price controls. Well, if I recall correctly, the hon. member opposed price controls a year ago, when prices were not nearly as high as they are now, just as vigorously as he did this afternoon.
He admitted that price controls may be necessary in a period of total war. It is true we are not in the state of total war, but no one has criticized the government in this house more vigorously than the hon. member for Eglinton for not preparing for such an emergency. No one has indicated more vigorously that we may find ourselves in such a position without warning at almost any time. If such is a possibility, if it is true that we must prepare for such an emergency, and since no one disagrees with the statement that in such an event the government should have such powers, then I fail to see how we can logically oppose granting to the government at this time the powers that are necessary.
We must stop this merry-go-round sometime. Today's paper carried a report that two of the great labour leaders in this country, the heads of two of the greatest unions in this country, have already announced that their unions, representing hundreds of thousands of workers, will immediately ask for an increase in wages to offset the recent rise in prices. That just cannot go on indefinitely, and whatever steps are necessary should be taken by the government and without delay.
We have only to take up almost any paper today to find advertisers asking the public to buy now before prices go higher. The longer the government delays the worse the situation becomes. I suggest the government should be given that power; and furthermore, it should undertake to use that power by whatever measures are necessary.
There is just one further point to which I should like to call the minister's attention. In his broadcast reported in the Toronto Globe and Mail of this morning, he is quoted as saying:
Canadians could best help the defence effort and overcome inflation by refusing to buy anything unless it was an absolute essential.
I presume there are still some people in Canada, possibly a great many, who can buy non-essentials, but certainly with food alone for a family of four costing now, according to the dominion bureau of statistics, $22 a week, the ordinary people of this country just cannot afford to buy any non-essentials. It takes
97G

Emergency Powers Act their pay envelopes to buy food, shelter, heat and clothing. We shall not be able to stop inflation by merely appealing to those who can buy non-essentials to stop buying them.
The people who want these controls applied are the great majority who today cannot buy anything but essentials, and. they, from my point of view, will support a control policy at this time.


Mr. F. D. Shaw (Red Deer):: Mr. Speaker, there are several things which I should like to say before we conclude our consideration of this matter. However, before proceeding to several of my observations I should like to suggest that I was rather intrigued by a certain statement made by the hon. member for Temiscouata (Mr. Pouliot). If I understood him correctly, he suggested that we should fire the officials of the bureau of statistics because of the information they have given to the public relative to the current cost of living. Obviously, we must take from that assertion that under a Liberal administration we have reached such a hopeless state of affairs that it is dangerous to give the people the truth.


Joseph William Noseworthy: The iron curtain.


Frederick Davis Shaw: I have great confidence in the officials of the bureau of statistics. I think the results of their studies are as accurate as they can be, considering the unavoidable difficulties which always confront a body of men when they undertake to reach decisions of a statistical character.
This afternoon I also listened with a great deal of interest to the hon. member for Eglin-ton. It is not my purpose to try to answer his argument. Surely there are members in the Conservative party who are better able to do that than I am, members of the Conservative party who supported price controls when the matter was before the house only very recently. It is about those price controls that I wish to make a few observations and also to refer to one or two statements made by the hon. member for Eglinton.
When this matter was before the house approximately a month ago, Mr. Speaker, my colleagues, the hon. member for Lethbridge (Mr. Blackmore), the hon. member for Peace River (Mr. Low) and the hon. member for Acadia (Mr. Quelch) made our position abundantly clear with respect to price controls. We have not wavered from that position at all. In fact, sir, developments during the past month have convinced us that there exists a greater urgency today than existed a month ago for the government to take practical and realistic action toward meeting


this problem of the cost of living, which certainly has become an extremely acute problem as far as tens of thousands of our Canadian people are concerned.
This afternoon the hon. member for Eglinton (Mr. Fleming) seemed to build the greater part ot his argument around what he defined as a belief of his, namely a belief in free enterprise. I do not like the expression "free enterprise". I believe firmly in private enterprise under a set of conditions which will guarantee the survival of private enterprise. If one takes the word "free" as associated with enterprise, and uses it in a literal sense, then probably I could agree with all that was said by the hon. member for Eglinton. However, I cannot accept that word as part of my definition of a desirable type of enterprise.
The hon. member warned against tampering with the laws of nature. I think he used the expression "the laws of economy"; but those words in that form do not mean too much to me. However, I may not have heard him correctly.


Donald Methuen Fleming: I used both expressions.


Frederick Davis Shaw: The hon. member says he used both expressions. In my humble judgment, as a consequence of government policy we have departed so far from the laws of nature, as applied to Canada's economy-the laws of economy, whatever that might mean; and I am trying to give the definition which I believe the hon. member for Eglinton gave- that, as a result, today we are living under a set of conditions which are completely abnormal.
The present dangerous inflationary condition in my opinion results from two things. The first of these is what I would describe as certain rather stupid government policies pursued not only recently but at least for the last decade. Then, secondly, we all realize that this abnormal condition today has been aggravated by the necessity for the preparation of adequate defences to meet whatever dangers there may be in the near future.
This afternoon the hon. member for Eglinton capped his argument-at least, I assume that is what he thought he did-by referring to a statement made by a former minister of finance, Mr. Ilsley, at about the time of the conclusion of hostilities at the end of world war II. I would have been much happier if the hon. member had not made reference to Mr. Ilsley. He stated that the former minister had asserted that price controls would not and could not work in peacetime. But, as was pointed out in the house not so long ago by the hon. member for Acadia (Mr. MARCH 6, 1951
Quelch), when in 1940 we made the suggestion that, owing to the rapidly climbing cost of living we should give consideration to some program of price controls, and rationing where necessary, it was the same Mr. Ilsley who said that it could not be done without a tremendous amount of bureaucratic control, and spying in every grocery store. However, it was only a short time after that that he was trying to convince the house, in effect, that he had been wholly and completely wrong, and that he could do it without any great amount of bureaucratic control and without putting a representative of the gestapo in every grocery store.
When price controls were debated in the house about a month ago the cost of living figure stood at 172.5. We pointed out, as did a great many other members in the house- possibly I should not say "a great many", but certainly a limited number-that today we have in Canada a body of about 238,000 old age pensioners who are finding it extremely difficult, if not in many eases virtually impossible to survive-and I use the word advisedly. Certainly many of them are obliged to get along without many of the things one would consider essential, such as certain necessary medical, dental, optical and other services. Of course in two or three provinces they would not have that problem, because in the three western provinces those services are provided.
Those people however are in a desperate position today. When I entered the House of Commons eleven years ago I believe they were receiving $20 a month as a basic pension. Today it is $40, if they are securing the maximum. That $40 today is of less value to them in meeting the cost of living than was the $20 they were receiving eleven years ago.
We have also that great body of workers who have not enjoyed increases in their incomes even remotely commensurate with the increase in the cost of living.
I shall mention another group-and I wish the Minister of National Defence (Mr. Claxton) were here, because I would say for his benefit that the wives and families of many servicemen today, those serving in the special force in Korea, are in many cases faced with serious difficulties in meeting the cost of living, plus those unavoidable hospital or doctor bills with which they are faced. Within the last few days I have received a number of communications relating to this matter.
Then of course we have the pensioners from the first and second world wars, and also a great many other people. We have tried to point out that this cannot fail to result in
Emergency Powers Act lower morale. We fear too that it is endangering the health of thousands of our people and we are most fearful that it could endanger our defence effort. We have pointed out several things which we think have contributed toward the present high cost of living. This talk about possible controls-controls if necessary, as it were, but not necessarily controls -is having a most damning effect. I have before me a file containing nineteen letters which were sent to a certain merchant within the past month by the suppliers of goods sold over his store counter. In all nineteen of these letters the suppliers have advised of immediate or pending increases in the prices of commodities they are supplying, such increases ranging up to as much as 25 per cent.
I am not going to refer to them in detail, but certainly the commodities listed are those which children must have every day. This talk about controls if necessary, but not necessarily controls, has caused many to hike their prices, in many cases I would say without justification, and in some cases with justification. But none of it justifies the circumstances which are leading them to have to do these things.
During the past month the wholesale prices for selected industrial and farm products have risen rapidly. Even at the time we were talking about this 172.5 cost of living index we had a positive guarantee, borne out by facts which could be observed by anyone, that there was bound to be a hike in the cost of living. I am going to venture the guess that if nothing more has been done before the end of this present year we are going to see a further minimum hike of anywhere from 15 to 20 points. I think I am extremely conservative when I say that, and I use the word conservative in its non-political sense.
Here is something else. Anyone who follows the financial publications knows that in many cases those engaged in business'-I am not saying all cases-have raised prices because of what they called uncontrollable factors, but right now they are declaring higher profits than they ever secured before. It is hard for me and for a lot of people to understand, much less appreciate, that sort of thing.


Edmund Davie Fulton: The government does.


Clarence Decatur Howe: I do not even think that the government appreciates it.


Edmund Davie Fulton: They allow it to go on.


Frederick Davis Shaw: Sometimes I am rather dubious about what is governing their thinking, even though I have been here for quite a long time. What can we expect to happen? Should

Emergency Powers Act we continue to pursue the same policies, which are made up substantially of hope. What are we to assume may transpire? Is production of civilian goods going to shoot up suddenly and catch up with demand for some unexplainable reason? I think under existing circumstances one would have to be optimistic almost to the point of being foolish to think that that sort of thing could occur, especially with $5 billion expenditures for defence alone staring us in the face.
The Minister of Trade and Commerce (Mr. Howe) has told us and he has told the country that industry is operating at practically full capacity. He has told the house and the country that there are limiting factors in our export trade, such as supplies. He has told us and the country definitely that the full impact of the defence program has not yet been felt by the country. He has said that that defence program will definitely disturb our way of living. Does he mean a greater and greater and greater increase in the cost of living? If he does not mean that I should like to know what he does mean. He has said also, and we all know it, that there will be shortages.
All of that provides, with certain other things, the factors which have led to an increase in the cost of living of 2.7 points since the report of a month ago. When the housewife today goes to buy the commodities which are essential to the welfare of her family she finds that her dollar is worth approximately one-half of what it was worth ten years ago. If she goes to purchase certain things she will find that it is worth even less than that. In other words, to secure the same volume of commodities which she secured in 1939 she must have practically two dollars.
Let me tell you that there are plenty of Mrs. Browns and Mrs. Smiths, yes, and of Mrs. Shaws, who have not two dollars for every one dollar they had in 1939. What is the result? They buy possibly one-half the volume of commodities which they bought in 1939. Thus Mary and Johnny must get along with considerably less than they had in 1939 when the standard of living even then was not cracked up by welfare officers and others as being too high or even high enough in the light of the great productive capacity of this country.
If Mrs. Brown goes to the store today to buy certain groceries which I have noted here and if in buying them she thinks back just four years she will find that beef has- gone up about 141 per cent. She will find that veal has gone up about 111 per cent-I think actually the figures are higher because these are statistics of about a month ago-she will find coffee has gone up about 127 per cent; flour by about 78 per cent; milk by about 79
nvir. Shaw.]

per cent; eggs by about 54 per cent; butter by 39 per cent and I notice another five cent hike today; sugar 45 per cent and bread, 67 per cent.
What we as members of parliament should do from the day we get home at Easter to the day we leave is to say to our wives, "You will not have to do any shopping while I am here, I will do it myself." I think many of us would come back wiser but possibly sadder men than we are right now. I think it would be an enlightening experience.
We have said, and I am going to repeat it, that we are convinced that government policy has proved its inability to meet and deal effectively with this problem of the cost of living. There has not been any evidence of it when you examine that cost of living index. While we do not like regimentation or the government meddling in the private affairs of our people any more than necessary, we believe that where the government has contributed so substantially toward the set of conditions which make action essential, if we are going to protect the welfare and health of our people, there will have to be some meddling by government temporarily.
We think there must be over-all price and wage control. We think that once the government has done that, even in spite of the hon. member for Eglinton (Mr. Fleming), we will have gone a step toward solving the problem. I think there will have to be a quick freeze. I did not like the way the hon. member kept bringing out the word "freeze" all during his speech today. I am not going to suggest anything, but I think perhaps he was carried away by his own personal enthusiasm for what he was saying and did not know that he was using the word so often.
While some of us are advocating a quick freeze we realize that adjustments will have to be made immediately if fairness is to be the determining factor. We believe that after prices have been frozen there must be immediate adjustments to provide a fair profit. As stated by the hon. member for Acadia, we think that wages must go hand in hand with this. They have got to be frozen and then immediately adjusted to allow a fair return for the work done. Then we say that hand in hand with that we must establish our farm prices on a basis of parity. We consider it absolutely necessary that they be adjusted in the light of the new adjusted price level to be established. We think that every effort should be made by the government, and private business should be encouraged, to step up production in Canada. We believe that you are going to have to adopt consumer subsidies to meet the problem that



B, 1951

[Stage Direction]
many persons in the extremely low income brackets are faced with today. We would even go so far as to say that in order to make that complete it would undoubtedly be necessary to ration certain commodities.
I know someone is going to say that is very strange for one who says he believes in freedom but, Mr. Speaker, if I were caught in a bear trap, before freezing to death I believe I would actually chew my own feet off. I think that much of my freedom, and I am afraid if this situation is allowed to go on without certain temporary drastic action such as I have suggested the net result can easily be the loss of our freedom.
In conclusion may I say that my reading has indicated to me that during world war I there was a Liberal government in Great Britain, and the prime minister and government of that day used to answer just about every question they were asked this way: Wait and see. I believe they even called the prime minister "wait-and-see Asquith", did they not? I wonder if what is happening in this country today is not a fair parallel of what existed over there.
Louis Stephen St-Laurent: Mr. Speaker, there is not very much that I want to say at this point. I am not rising to participate in the controversy between the hon. member for Eglinton (Mr. Fleming) andi the hon. member for York South (Mr. Noseworthy). I think they are quite capable of handling that themselves, but there is one point that I think I should correct. The leader of the opposition (Mr. Drew) seems to have got the impression from a speech I made a week ago that I had indicated that the government was unlikely to introduce any controls unless we got into something approaching an all-out war. I am sorry if anyone who heard that speech or saw a copy of it got that impression from it. I endeavoured to point out that there were many features in the present situation which resembled that of ten years ago, but there were also substantial differences. I did of course say that ten years ago we were in an all-out war and that we are not in an allout war at the present time.
Anyone who did not go beyond that might have gathered that in speaking about inflation, and the measures that would be appropriate to combat inflation, I had referred to an all-out war situation, but I was careful to point out-and I am sorry to have to refer to the language I used at that time-that I was not therein making an argument for or against controls. I pointed out that in 1941 the pressures bad developed to a greater degree in Canada than they had in the United States at that time because we had
Emergency Powers Act already been at war for two years and the United' States was not then at war. I pointed out that at the present time the pressures on prices and inflationary pressures generally seemed to have attained a greater degree in the United' States than they had in Canada, and that it was practically impossible to prevent some inflation in Canada when there was inflation in the United' States.
I boasted that the price controls we had introduced in 1941 had operated in a very satisfactory and successful way, and that for that reason it might appear to many that what had been successful then would be successful now. I also added that I was very sorry that I could not feel that was so because if we did feel that by the introduction of price controls we could cure this situation we would be very happy to adopt them. Then I put the question: "But is that so?" I then went on to discuss what seemed to me to be substantial differences between the situation of that period and the situation of this time.
I did say that at this time we were trying to build up our strength as rapidly as possible to prevent the outbreak of a third world war, whilst in 1941 we were in the throes of an actual war, and were cutting out all but the bare essentials and devoting the whole of the rest of our energies to the winning of that war as quickly as possible.
I said that while building up the required strength to deter war we wanted to be able to maintain a fair standard of living, to maintain our standard of living at a reasonable level. I added that, in other words, we did not want to cut our civilian standard to bare essentials unless and until we have to, but I certainly did not intend to convey the idea that there was nothing to be done unless we were in something approaching all-out war.
I said that the government might of course hold down the prices of our imports because the commodities we import at this time are a much greater proportion of our consumer goods than those that were being imported in 1941. At that time we were importing only the things required for the prosecution of our war effort while at the present time we are importing larger quantities of civilian commodities, the prices of which depend upon the markets from whence they come. I said that we could keep the price of these imported commodities down by subsidies, but that we did not know to what extent the controls that were being attempted in the United States might be successful, and that if we entered upon a policy of that kind we did not know what the extent of the drain on our own treasury for subsidies might become.

Emergency Powers Act
I also pointed out that the prices of the consumer goods of the classes of our exports were very much dependent upon the prices that could be obtained in the markets to which they were exported, and that that had to be so because if we fixed ceilings that were below the prices that could be obtained in the markets to which our exports went all these commodities would go to those markets unless they were embargoed and we compelled the producers here to sell them to Canadian consumers at prices lower than those that could be obtained in the foreign markets. I said that if anything of that character were attempted there would have to be equalization pools established to give a substantially similar return to all producers of the total quantity.
I also said that it was true that we had kept prices below the United States price level between 1941 and 1946 but that our price ceilings did not prevent a considerable measure of wartime inflation. What they did was to alleviate and postpone the effect of that wartime inflation, but once the war was over we found it was not practicable to have a price structure seriously out of line with the price structure in the United States, and we had to allow our prices to catch up. I added that I thought it had been a wise policy to postpone the effects of inflation until the war was over and until we could devote our energies to the production of greater quantities of commodities for civilian purposes; that would help to meet this problem of inflation. I stated that it was wise to remember that our price ceilings had not prevented inflation, and I ventured to make the bald statement that price control by itself cannot prevent inflation. What it can do is to change the direction and retard some of the effects of inflation. Then I said that, of course, is not an argument either for or against price control.
I went on to say that we must try to keep as low as possible the amount of commodities taken off for our defence purposes, and to see to it that the remainder left for civilian consumption was distributed as fairly as possible, and that price controls [DOT] might help to do that, but that we would be deceiving ourselves if we thought price controls gave us the whole answer. Then I added that another serious problem in connection with price controls was the matter of enforcement. During the war there was this patriotic urge that made us accept the restrictions or inconveniences to which we were being subjected without too much murmuring, because we all realized that they were quite inconsequential when compared with what our brothers, our sons and daughters in the

armed forces overseas were doing for the country. This created a situation in which most of us here felt that the price control and rationing system was operating in a manner that was fair to everybody, and that was necessary for our own salvation. It would be difficult to obtain that kind of public support for price controls at the present juncture, and no one in this country would want the kind of controls that can only be enforced in a police state.
Then I went on to say that all this does not mean that some controls are not being considered. We have some already, and parliament is at the present time dealing with a bill to give the government power to impose wider controls. We will not hesitate to impose any controls we believe will really work to protect our people generally against the injustice of rising prices. But we are not going to recommend controls unless and until we can honestly tell the public we believe they will work. We are not going to do any shadow-boxing merely because it might get us some immediate applause. At the present time, we do not feel that the conditions are such that an over-all system of price control would be really effective. We wish it were otherwise, and it may become otherwise; and as I said earlier we are keeping our minds free and ready to adapt our policies to any new and changing conditions.
We are asked to declare at this time what the government's intentions are. The government is in the position where, if it declares its intentions, they must not be intentions merely designed to serve for the production of paving blocks for the nether regions. They have to be the kind of intentions we believe we can carry out and implement. Some hon. members seem to believe that price controls at this time would cure the situation. I do not think they would. I do not think it would be healthy for a democratic government to give the impression that it was going to put into effect a series of restrictions on the freedom of the citizens, unless it also coupled that with the assertion it believed it was something that was going to work and which would, in the end, prove to be beneficial to the welfare of the community.
Some reference was made to questions that were put to my colleague the Minister of Trade and Commerce (Mr. Howe) by gentlemen of the press last night. Some questions concerned whether we were considering a mark-up or profit control. We are having all those matters examined, and we are endeavouring to find what we can do that will prove to be effective. There are a great many who believe that it can be done at once by price

control, but not everyone believes that. When I returned from Quebec, where I had the privilege of spending the week end, I found a letter from the Canadian Association of Consumers, signed by the president, Mrs. Dorothy L. Walton. There was a note on it saying she had sent copies to the leader of the opposition, the leader of the C.C.F. party and the leader of the Social Credit party. The letter contains this statement:
The C.A.C. feels that the establishment of over-all price ceilings is not a safe answer to the price problem at the moment. It considers, moreover, any kind of control that might be set up for prices must include controls on the ingredients that go into prices, and that wages and salaries form an important part of such ingredients.
I do not know Mrs. Walton. I inquired, and I was told that this was a large representative association of Canadian housewives who have been considering this problem, and that is their conclusion. The situation the government faces is that some inflation has been inevitable. Hon. members say that we did not, through the Bank of Canada, put restrictions upon the extension of credit as quickly as we should have. There may be something in that reproach, but at the present time those restrictions have been applied. The governor and administrators of the Bank of Canada are, I feel from my contacts with them, as concerned over the validity of Canadian currency as any of us. They have been watching the situation carefully, and we have not just been waiting to see, but we have been listening to their advice and endeavouring to adopt measures which we thought would be proper to recommend to the Canadian public as things which we believe, in spite of the inconvenience they might cause certain members of the public, to be for the general welfare of the whole people.
I must confess that there is some small measure of truth in the assertion that there are members on this side of the house who have been urging that price controls be resorted to at once. One of them said to me, "Well, even if we are not confident they will work, why don't we just try them to let the people see they do not work? After all, you never know what will work until you try it". That reminded me of a little jingle I heard a long time ago which runs like this:
I wonder, quoth the maiden with a sigh:
Could I look in my ear with my eye?
I am sure I could do it If I put my mind to it;
You never know what you can do till you try.
I was not convinced that we had to go quite that far, and try things that appear obviously to us to be like attempting to look into one's ear with one's eye. But that does
Defence Production Act not mean, and I would not want anyone to take it, that I am indicating that the government is unlikely to impose controls unless and until we are in something approaching all-out war. We will, just as quickly as we can find reasonable grounds to believe in the efficiency of any or all controls, not hesitate to use the powers provided by this bill, if and when it receives the assent of the two houses of parliament and of the representative of His Majesty.


Mr. Speaker:: Is it the pleasure of the house to adopt the motion?


Some hon. Members:: Agreed.


Mr, Drew:: On division.
Motion agreed to on division and bill read the third time and passed.



DEFENCE PRODUCTION ACT


[Stage Direction]
01 ECONOMIC AND INDUSTRIAL FACILITIES
The house resumed, from Monday, March 5, consideration in committee of Bill No. 77, respecting the department of defence production-Mr. St. Laurent-Mr. Beaudoin in the chair.
On section 27-Appointment of controller.
Edmund Davie Fulton: Last night on this section we were discussing the question of whether or not a limitation could be placed on the extent of the powers exercisable by the controller over the whole of the business and whether it would be feasible to limit his right to control that portion of the business only which was necessarily concerned with the performance of the war contract.
Nothing that was said by the Minister of Trade and Commerce or by the Prime Minister indicated that there was any desire to appoint controllers to control the whole of the business where such a procedure would not be necessary and where only a part of the business was actually involved in the performance of the contract. It was therefore suggested that perhaps an amendment might be moved to incorporate into the section just such a limitation. Accordingly I have an amendment here, and the amendment would be in three parts. I wonder if I might ask the chairman a question at this point. What would have to be done, Mr. Chairman, would be to amend first subsection 1 of this section. Then there would be a consequential amendment to subsection 2; that is if the amendment were accepted. Then again, if that were accepted there would be a consequential amendment to subsection 3. Should I move the whole of the amendment at once or should I take it subsection by subsection?
982	HOUSE OF
Defence Production Act
The Depuly Chairman: I would1 submit to the hon. member that we should consider each subsection individually. He might move his amendment to the first subsection; and if it is defeated, he may not have to move any consequential amendments. We will therefore consider subsection 1 of section 27.


Edmund Davie Fulton: Thank you, Mr. Chairman. I think I have already indicated sufficiently the purpose of this amendment, but I should just like to outline the general scheme so that hon. members may see what I have in mind. Then, as the chairman has suggested, I will move simply the amendment to subsection 1. That amendment would limit the appointment of a controller to that part of the business necessarily connected with or involved in the performance of the contract. To carry out that proposal, it would then be necessary to amend subsection 2, in order to provide that the controller's powers as an agent of the owner shall extend only to that part of the business which he was appointed to control and not to the rest; and that his appointment shall terminate when the contract has been complied with; and then it would be necessary further to provide that subsection 3 would be subject to the provisions of the earlier amendment. As the first stage in that process, I would move, seconded by the hon. member for Greenwood:
That subsection (1) oi section 27 of Bill 77 be amended by deleting the words "the whole or any part of the business of that person" at lines 36 and 37 and substituting therefor the words "such part only of the business of that person as is necessarily connected with or involved in the performance of such contract or compliance with such direction or regulation."


Clarence Decatur Howe: I am sorry that that amendment is not acceptable to the government. In the first place, how in the world could you define what part of the business is involved? There is no chalk line drawn around a particular operation. The reason that a controller is put in charge-and it is the only reason-is that the management of the plant is inefficient. If the management were proper, there would be no need for a controller. I remember the appointment of some twenty or twenty-five controllers during the course of the last war, but I cannot remember an occasion on which a controller was put in to control only part of a plant. The controller is put in to control the management of the plant so that it can carry out its obligations. The difficulty may be that the plant is in bankruptcy through inefficient management or the situation may be that the plant is keeping false accounts. But in any case I do not see how you could apply the duties of a controller to part of the plant and not to all of the plant. The thing would be a farce. We would spend 

endless time trying to get a decision as to what part of the operation was involved, when the whole operation was undoubtedly involved. Of course if you had a plant in one city and a plant in another city, you could then put a manager into the plant which was working on the contract, straighten out the management of that particular plant, and allow the other plant in which you were not interested to do what it liked. That can be done. But that is an exceptional case. Usually the plant is an integrated plant and the management applies to all the operations.


Edmund Davie Fulton: I appreciate the point of what the minister has said; but by using the word "plant" and overlooking the fact that the wording of the section and the wording of the amendment is "business", I think he has missed the point I was trying to get at. I agree that if there was one plant engaged in a defence contract, then it would probably be impossible to segregate the operations. In that case it would be easy to say, and the decision would be upheld, that the whole of the plant was necessarily involved in the performance of the contract. But here we have used the word "business". I am sure there must be many cases in which concerns operate plants in separate cities or where one side of their business perhaps is engaged in a manufacturing process and the other side is engaged in a distributing process but it is the same business and may be the same company operating both processes. What this amendment is designed to ensure is that the powers to appoint a controller would be limited only to the side of the business which is engaged in the manufacturing under the defence contract, and that if the distributing process was not necessarily involved in the performance of that contract or compliance with the direction, then there would be no power to extend the authority of the controller over that distributing process. That is all that is involved, and that is why the word used is "business" rather than "plant". That being what is in mind, could the minister say that there is some room for an amendment along these lines?


Clarence Decatur Howe: No, I am sorry that 1 cannot say it. A business must have a head, and the trouble would be with the head of the business. If the head of the business were sound he would straighten out the operation in which we were interested. That would be inevitable. If the head of the business is unsound there is no way that the government can straighten out the situation except to replace the head of the business with a controller and see that it is straightened out.
I remember one bad case where there were several plants involved. The trouble was

at the top. We put a controller in charge of the business for nearly a year and got the accounts untangled and recovered close to a million dollars, straightened out the contract, got it completed and left the thing in a satisfactory condition. But if we had been tied down to an amendment that said we could only go into a part of the plant that was carrying out the defence contract that operation would not have been possible.
In every case, the reason for putting in the controller is that it means that the head of the business is not doing the job.
Amendment negatived.
Subsection 1 of section 27 agreed to.
On subsection 2 of section 27-Controller agent of the owner.


Edmund Davie Fulton: Here, Mr. Chairman, although I realize that the amendment to subclause 1 has been defeated, I still think there is room to make the same point, and I would therefore move, seconded by the hon. member for Vancouver-Quadra:
That subsection (2) of section 27 of Bill 77 be amended by adding thereto the following words:
"Provided however that the acts and powers of the controller shall extend only to those things which are necessary for the due completion of the contract or compliance with the direction or regulation and his appointment and powers hereunder shall be deemed to terminate when the contract has been performed or the direction or regulation has been complied with."


Clarence Decatur Howe: Mr. Chairman, the same objection applies here. It is quite unworkable. I do not wish to object to amendments that improve the bill, but this is an amendment which would nullify the usefulness of controllers. I assure hon. members that when the chips are down controllers are very necessary. If I had time I could give chapter and verse about twenty or twenty-five controllerships in the last war, and what they accomplished. If I did that my hon. friend would not try to tie the position of a controller up in such a way that the controllership could not operate effectively. Therefore I must object to the amendment.


Howard Charles Green: May I point out to the minister that this amendment provides power to the controller to complete his work. There is no interference in the completion of his work. But then it goes on to say that once that work has been completed his powers are over. Surely there could be no objection to that. If I may read it to the minister-


Clarence Decatur Howe: There is no object to it, and there is no purpose in it. Why would we keep a controller in a plant or put him in a plant if we did not need him there?


Howard Charles Green: If that is so, then certainly the minister should not object to this amendment.
Defence Production Act


Clarence Decatur Howe: I do object to it.


Howard Charles Green: All the amendment provides
for is that when the government contract has been fulfilled the controller must step out. What earthly reason has the government got to keep any controller in there after the government's contract has been fulfilled? And that of course is all that this amendment provides.
The subsection which is under consideration gives the controller very wide powers. It says:
Where a controller has been appointed to carry on a business or a part thereof, he shall be deemed to be the agent of the owner thereof for the purpose of carrying on the business or that part thereof, except that the owner shall not have any right to control the business or that part thereof and the controller may, subject to any instructions of the minister, do all such things as he thinks fit for the purpose of carrying on the business or that part thereof.
That gives the controller tremendously wide powers. The amendment reads:
Provided however that the acts and powers of the controller shall extend only to those things which are necessary for the due completion of the contract or compliance with the direction or regulation . . .
That part of the amendment surely is not objectionable. It gives the controller the power to do whatever is necessary to complete his job.


Clarence Decatur Howe: Let me ask my hon. friend a
question.. Who decides what is necessary?


Stanley Howard Knowles: The lawyers.


Clarence Decatur Howe: Yes.


Howard Charles Green: That is true of any type of
legislation. That is no argument at all.


Clarence Decatur Howe: Instead of straightening out the contract we spend a few months deciding how much he is entitled to control under that amendment.


George Alexander Drew: That is not what it means at all.


Howard Charles Green: The amendment goes on:
. . . and his appointment and powers hereunder shall be deemed to terminate when the contract has been performed or the direction or regulation has been complied with.
There surely can be no objection to that, because once the government contract has been finished then the government should have no further interest; and if the owner of the business cannot run it as well as the controller can run it, that is up to the owner. Surely it is not up to the government to continue in the plant once the government contract has been fulfilled. I urge upon the minister to give further consideration to that amendment, because surely there is nothing unfair sought by it. It does not restrict the controller unduly, and yet it gives the owner whose business can be taken over some rights.

Defence Production Act


Clarence Decatur Howe: Question.


The Deputy Chairman:: Shall the amendment carry?


Edmund Davie Fulton: If the acts of the controller are as uniformly benevolent as the minister has said on a couple of occasions this afternoon that they are, then so long as his acts are directed towards compliance with the war contract there should not surely be much tendency to question his acts. Where his acts are directed toward something that is outside the war contract there would be the right to question whether he was exceeding his powers and staying in control and doing certain acts in the name of the owner after the contract had been complied with. That is what it is intended to effect. I would make this observation. If the minister feels the wording is too wide in its present form but that the object is or might be acceptable, then I at any rate am not bound by those words if some other words would be more acceptable to him.


Clarence Decatur Howe: I am sorry. Everything that is being suggested tends to make the act unworkable. I want a workable act. I know something about these things, and perhaps I have the advantage over those who are proposing amendments to the bill because I have been up to my elbows in controller-ships. I know the dangers; I know the liabilities of the government for the acts of the controller while he is in office. I want to make sure that effective controllerships can be maintained, and if it is necessary to argue what he is entitled to do under this legislation then the effectiveness of the controllership is greatly limited. Therefore I must oppose the amendment.


Louis-René Beaudoin: Shall the amendment carry?


George Alexander Drew: Mr. Chairman-


Clarence Decatur Howe: Now we get it!


George Alexander Drew: The comment made by the
minister is indicative of the extent of any real desire he is showing to accept suggestions in regard to amendments during this debate. Anything that has interfered with the course of this debate has been due to the fact that he will not listen to anything, unless it happens to meet with his approval.
The proposal put forward is simple and understandable. It says simply, in effect, that when the purpose for which the controller has been appointed is complied with, the controller shall cease to be in control.


Clarence Decatur Howe: It says much more than that, sir.


George Alexander Drew: Well, anyone is in a position to read exactly what the words are, and the effect of the words in the amendment is precisely what I have said. The minister makes the suggestion that there is great difficulty in determining when that point arises. I would point out that if there is that much difficulty in one set of human brains in making a decision of that kind, then it is utterly impossible for any other set of human brains to make the tremendously important decisions included in this bill, with its wide open powers.
After all, this measure is placing in the hands of the minister, and those who are associated with him, immensely wide powers. As has been stated here, there is not only a tendency to grant powers under proper restraint and proper definition, but there is also the desire on the part of members in the committee that some things will be done which should have been done long ago.
But a minister of the government, which is trying to emphasize that we should be retaining as much of the semblance of peace as is possible, is going farther than this government or any other government ever went during a time of war, and is asking that there be no limit placed upon the time during which these controllers may be appointed. It involves discretion on the part of the minister and his associates; and the very discretion which they exercise can be exercised equally well in determining when the necessity for the continuance of a controller comes to an end.


Clarence Decatur Howe: My hon. friend has dealt with
only part of the amendment. The part to which I object states:
Provided however that the acts and powers of the controller shall extend only to those things which are necessary for the due completion of the contract or compliance with the direction or regulation;
That is the point that would be argued for months. Remember, no one is enthralled with the idea of having a controller in his plant. While that argument is going on the usefulness of the controller and the ability of the controller to protect the government would probably be nullified, and there would be no purpose in putting in a controller when the argument was finished.


Edmund Davie Fulton: I do not agree with the
minister's statement. However, he has said that he has had great experience in this matter and, on the principle that half a loaf is better than no bread, would he be willing to delete the first part of the amendment, so that it would read:
Provided however that, on due completion, his appointment shall be deemed to terminate.

I must say that I have not a copy of my amendment. One has now been handed to me, and I find that the suggestion I make now would have the amendment read:
Provided however that the appointment and powers of the controller hereunder shall be deemed to terminate when the contract has been performed or the direction or regulation has been complied with.


Clarence Decatur Howe: How would the amendment
work where a contractor refused to accept a contract?


Edmund Davie Fulton: You would direct that he shall accept it; then if you think he is likely to fail, or if he does fail, you place in a controller. The amendment uses the words, "shall be deemed to terminate when the contract has been performed or the direction or regulation has been complied with." That is why I put "direction or regulation" in there.


Clarence Decatur Howe: I would like to oblige my hon. friend; he is acting reasonably. If I did not believe that this would nullify at least in part the real freedom under the contract to do what is required, I would be inclined to accept the hon. member's last suggestion. However, my advisers believe, as I do, that it would not be safe to do so, and still have an effective section.
Amendment negatived on division.
Subsection 2 of section 27 agreed to.
Subsection 3 of section 27 agreed to.
Section 27 agreed to on division.
On section 28-Relief from other obligations.


George Alexander Drew: This is the section which gives power to the minister to direct that a person shall not be bound by any obligation, restriction or limitation imposed on that person by or under any statute, order, rule, regulation, bylaw, or contract with respect to such matters as may be specified in the order affecting the entry into or the performance of a defence contract by that person, or the carrying out of an order made by the minister under this act.
I would point out that this is a power in the hands of the minister, not even in the hands of the government by order in council, to negative the effect of any dominion statute, of any provincial statute, of any municipal bylaw and of any regulation or direction passed under those statutes or bylaws. Certainly before the committee should consider any such sweeping powers as that there should be a very clear and understandable explanation as to why such powers should be sought at all.


Clarence Decatur Howe: The first part of the section is to allow the government, in carrying out a
Defence Production Act war contract, to set aside zoning regulations and matters of that sort. Sometimes it is necessary to do that. The second part is to establish force majeure if the government insists that civilian business be displaced by war business. This was taken from the Department of Munitions and Supply Act at the time of the last war. I think there is nothing serious about this section.


George Alexander Drew: That is certainly not a very detailed explanation as to why sweeping powers that have the effect of completely setting aside the effect of any statute or municipal bylaw should be passed by the House of Commons. This is, in effect, placing in the hands of the minister, or someone he may designate, under section 5 of the bill, power to say that no matter what the contract says and no matter what, law there is, if one of these defence contracis is involved it may be set aside.
We have been told on different occasions that so far as possible we should retain the atmosphere of peace. The whole drafting of this act is carrying forward the same atmosphere in which it was necessary to do many things under pressure and at a time of great emergency during the last war. Certainly in times like these some of the ordinary rights of the citizens of this country should be preserved when no one of us can tell how long decisions of this kind may be effective. If we find it necessary to adopt measures like these today, it may well be that it may be necessary to continue them in operation for many years to come, beyond the period of the measure, which is now set at five years.
I do submit we should have a much better explanation of why these powers are necessary, because it would be very easy to frame an appropriate section which would make it clear that in order to carry out any defence contract, appropriate application could be made, and that there should be a certain protection of an individual or a company retained during this period, when we wish to retain as much as possible of the general relationship and general atmosphere of normal business activity.


Clarence Decatur Howe: This is an act that places the production of defence contracts above all other interests. If it is not going to do that then probably this first paragraph is not justified. I do not think that anyone will question that the second paragraph is not an essential paragraph. As I say, it places defence production over all other matters in time of emergency. My hon. friend said that it might go on for years but I point out that the same clause was cancelled only a year ago as being unnecessary. We had it for the
986	HOUSE OF
Defence Production Act last war and we cancelled it when the reconstruction period was over. We are now asking to re-establish it. I believe it is a necessary law; I believe it is a desirable law if it is the intention to place defence production over civilian matters. I see no reason for changing the clause.


Edmund Davie Fulton: I can see the necessity for powers provided by section 28(1) in time of emergency or in time of actual war when the minister has to get supplies quickly. But as was said earlier this evening, and I do not agree altogether that it is true, many of these things are much more acceptable in time of an actual shooting war because of the patriotic fervour that is engendered in the people. I do not think that Canadians are patriotic only in time of war. I think they are equally patriotic in a time such as this when it is necessary to place ourselves in a position to restrain aggression.
I suggest to the minister that for the time being I believe he could carry out the project he has in mind under section 28(1) by negotiation as well as by order. I admit that it would take a little longer but I should like to hear the minister's opinion on this. Until we are actually engaged in a shooting war I think an appeal could be made to the patriotism and good sense of contractors who could supply the materials the minister desired to purchase. Such a man could be appealed to to let that material go for defence purposes. Even with the slight delay that would be involved I believe that that would meet the purposes the minister has in mind.
Let us assume that a contractor has a contract to build a highway bridge in one of the provinces and the minister suddenly finds that he needs steel with which to build motor vehicles. Could he not say to the contractor, "I want to divert your supplies of steel to the motor car company". I believe that contractor and the provincial government would agree that under the circumstances the steel should go to the motor car company and they would get along with a wooden bridge in the meantime.
I suggest that these results could be accomplished by negotiation rather than the issuance of an order. I ask the minister whether it could not be provided that that subsection be brought into effect by proclamation to be issued in the emergency of a shooting war or some other greatly accelerated emergency. In the meantime we should try to get along and accomplish these things by negotiation rather than the setting aside of provincial statutes or contracts.


Clarence Decatur Howe: I said last night that as far as the production of munitions goes we are in a


war at the present time. We have a schedule to get this country armed and to assist our allies to arm just as rapidly as possible. The fact that there is no shooting does not change the position in any way as far as the production of munitions goes. If I did not think that this subsection 1 was necessary, I would not have proposed it.
I would have no objection to changing the words "the minister may" to read, "the governor in council may." That would provide a pretty good safeguard because the minister would have to go to the full government in order to have the section made operative. Would that meet the situation?


Edmund Davie Fulton: Yes.


Clarence Decatur Howe: I will move that.


Mr. Macdonnell (Greenwood):: Could the
minister give us an illustration where it was found necessary during the last war to override statutes under the provisions of the munitions and supply act?


Clarence Decatur Howe: I can remember cases but not
definitely enough to give chapter and verse. If it is made "governor in council" I think that would provide a sufficient safeguard. Governments do not like to interfere with other governments. I assure you that ministers do not, and governments even less. I would move:
That section 28, subsection 1, be amended by deleting the word "minister" in line one and substituting therefor the words "governor in council."


[Stage Direction]
Amendment agreed to.
Stanley Howard Knowles: May I ask whether at any
time relief from income tax legislation was given under section 15 of the Department of Munitions and Supply Act?


Clarence Decatur Howe: No.


Stanley Howard Knowles: Everybody is smiling, but
the section seems to be worded in such a way that an order could be passed to provide that a person working on a defence contract could be relieved from the provisions of that statute. It seems to me that that kind of relief could be afforded, but I hope that is not so. I should like to know if there was any such case during the time the munitions and supply act was in effect.


Clarence Decatur Howe: There was no such case. It is
a pretty fair rule of this government that no minister moves to upset the regulations of another minister of the same government by force.


Stanley Howard Knowles: This refers to the possibility of relieving persons from the provisions of any statute and it raises the question as to what statutes are in mind. There are many federal statutes which come under the supervision of the other ministers.


Clarence Decatur Howe: This refers chiefly to zoning and building bylaws.


Stanley Howard Knowles: The reference is mainly to
provincial and municipal statutes or orders?


Clarence Decatur Howe: Yes.
Section as amended agreed to.
On section 29-Inquiry and appointment of investigator.


Edmund Davie Fulton: I should like to say a word or
two with respect to some of the statements made by the minister at a press conference which was recorded yesterday and broadcast last night. I am not going to go back to a general discussion of the bill, but the two subjects on which I want to make broad inquiry are related particularly to section 29. According to a press report of the minister's statement which appeared in the Montreal Gazette of this morning the minister said that the government could not create a system of price control without first suspending the Combines Investigation Act.


Clarence Decatur Howe: That is a press report of what
I said. It has nothing to do with this act in any way. I said there were certain cases where it would be desirable to get relief from the threat of prosecution under the Combines Investigation Act, that is, where a group of producers was called together for the purpose of holding down prices. The group would not come together under the direction of a controller for such purpose unless they were relieved from that threat. It is illegal, as you know, for members of an industry to combine to set fixed prices. Whether they are low prices or high prices does not matter. There is nothing in this act that deals with that situation. That would be dealt with through the Department of Justice.


Edmund Davie Fulton: What I was wondering was
whether the minister pretty well has the power under this act to set prices. I would imagine he would do so by suggestion first and compulsion later. I wondered whether he had in his own mind any doubts with respect to the Combines Investigation Act as to telling a number of industries that they would produce a certain commodity at a set price, the same price as each other industry. I mean he thereby eliminates competition, and he also has power here to send in an investigator, which seems to me to be closely related to the same matter, and to determine costs of production, whether fair books are being kept, and so on. It seemed to me that his statement that it would be difficult to administer a control system as long as the Combines Investigation Act was in effect
Defence Production Act would have some bearing on this section because of the power to set prices at which articles would be produced.


Clarence Decatur Howe: I was being asked questions by six or seven reporters. I have no clear idea of exactly what I said, and I do not remember the exact question I answered. I have not seen the Canadian Press report and I did not hear the broadcast. Therefore I am in a rather difficult position but I will be glad to make a statement with reference to the subject matter we are discussing which will set out my position, and I am in agreement on it with the Minister of Justice.


Stanley Howard Knowles: You had better get a record of it and take it home.


Clarence Decatur Howe: I think we can get it recorded here. The government has no thought of suspending the Combines Investigation Act in the sense of proposing a measure to declare that the act will not be operative during any specified period. I assure the house that no such thing was on my mind when I answered a question in the course of a press conference yesterday. I had in mind a situation where it might be necessary in the public interest, and by reason of the defence program, to invite a number of industries to take part in arrangements which would ordinarily make them suspect under the Combines Investigation Act, and where it would be necessary to give them some assurance, limited to the particular case, that their actions would not be so construed. If and when such a situation arises it should be defined and placed on record under the provisions of the Emergency Powers Act. Any industry before entering into such an arrangement will do well to see to it that its position has been so defined because otherwise it will be amenable to all the processes of the Combines Investigation Act.
I can give you a specific instance. Those in the oil industry are very particular not to have anything to do with each other. I think perhaps the lead in that regard is taken by Imperial because the Standard Oil Company have had experience with a similar act in the United States. They will not sit in meetings with other oil producers where prices are discussed. It is very difficult to discuss prices in such circumstances unless all units in the industry are willing to sit down together. In a case like that, with the co-operation of the Minister of Justice I think we can assure the industry that nothing arising out of these meetings would make members of the industry suspect under the Combines Investigation Act.

Defence Production Act


Major James William Coldwell: Under the Emergency Powers Act would) you not have to place it on the records of the house?


Clarence Decatur Howe: It would be placed on record with the Department of Justice and with the industry.


Edmund Davie Fulton: It will be placed on record that you have passed an order in council exempting this group of industries from the operation of the Combines Investigation Act?


Clarence Decatur Howe: That is not the thought. It is to place on record the fact that the industry was brought together by the minister for the purpose of discussing prices, and that if a price policy arising out of that meeting is followed there should be no prosecution under the Combines Investigation Act.


Major James William Coldwell: Was the act not amended so that any regulation made under the Regulations Act would be reported to the house? Would this not properly fall under that? Would it not be wise to have such a decision placed on the records of the house when the house meets?


Stuart Sinclair Garson: Mr. Chairman, I think this is the position. The Combines Investigation Act is of general application, and where you have different industries agreeing with one another to fix prices, no matter at what level, it is contrary to that act. With respect to defence production, in a certain specific case it might be advisable to call, we will say, the different companies in the oil industry together and say to them that in order to hold the line it is desirable to drop the price of petroleum products by two cents a unit. That agreement entered into quite openly, and with official blessing, would still constitute a prima facie breach of the Combines Investigation Act, and that is known to the legal advisers of these concerns. Therefore, unless they can get a direction under appropriate legislation from the minister responsible, they just will not enter into that type of arrangement. If they entered into it under a mere direction in the absence of any authorizing legislation the question would arise under the Combines Investigation Act as to whether that was in the public interest. That would leave them in the position that if they should be subsequently prosecuted they would be deeply concerned as to whether under all the circumstances they could substantiate some time later on that this agreement was in the public interest. Therefore, in the interests of the proper administration of the Emergency Powers Act on the one hand and the Combines Investigation Act on the other, it is very desirable that any of these arrangements of this kind that are entered into under direction

should be covered by a regulation or an order which will be recorded with the combines investigation commission, and would, I presume, likely take the form of an order that would be tabled in parliament. Certainly we would have to be answerable for it.


Edmund Davie Fulton: Can the minister say whether that would be made under the Emergency Powers Act which we have just passed?


Stuart Sinclair Garson: Yes.


Stanley Howard Knowles: Then it would have to be tabled.


Stuart Sinclair Garson: Let me clear up my hon. friend's point-not under the Emergency Powers Act itself but under a regulation to be passed under the Emergency Powers Act.


Edmund Davie Fulton: Under and by virtue of the powers conferred by the Emergency Powers Act.


Stanley Howard Knowles: But remember that act was amended so that it is now required that any regulation as defined by the Regulations Act must be tabled. It is not just orders in council; it goes further.


Stuart Sinclair Garson: That is quite true. That act has been amended, and anything that was done pursuant to that act would have to comply with the provisions thereof.


Major James William Coldwell: Therefore, it should be
tabled.


Stuart Sinclair Garson: If it is a regulation passed under the Emergency Powers Act, and if it is a regulation within the meaning of the Regulations Act, then it must be tabled under the provisions of the Emergency Powers Act.


Major James William Coldwell: Would this come under that provision, in your opinion?


Stuart Sinclair Garson: My hon. friend is asking me an extremely hypothetical question. Because we have the Emergency Powers Act now, regulations or orders in council may be passed under that act, and then pursuant to those orders in council other things may be passed. I am afraid that I cannot oblige him with an opinion on something so remote, something that has not yet been bom, but quite probably so, yes.


Clarence Decatur Howe: Just to show the difference in the feeling of urgency between the congress of the United States and this House of Commons, the first thing that was done when their defence production plan was entered into was that the combines legislation in the United States was in effect suspended in so far as it affected war industries. I believe it might very well be done here. However,

knowing the susceptibilities of the leader of the opposition, I would not think of trying it.


George Alexander Drew: Mr. Chairman, section 28 does just precisely that, and the explanation of the Minister of Justice completely overlooked the fact that we have just been discussing the section under which any other statute can be set aside where it affects defence contracts.


Stuart Sinclair Garson: May I make one observation concerning my hon. friend's remark. I do not think that, even within the limited meaning he was giving to his remarks, that is confining them to section 28, it affords the interpretation he has given. Section 28, I would point
Defence Production Act out, relates entirely to defence contracts, whereas the Emergency Powers Act established a wider application.
Section stands.
Progress reported.
BUSINESS OF THE HOUSE Mr. Fournier (Hull): Mr. Speaker, tomorrow is private members' day and we will follow the order set out in standing order 15.


[Stage Direction]
It being five minutes after eleven o'clock the house adjourned, without question put, pursuant to standing order.


[Stage Direction]
Office of the Premier Alberta
Edmonton, January 26, 1951 Hon. Stuart S. Garson, K.C.,
Minister of Justice and Attorney General of Canada, Ottawa, Canada.
Dear Mr. Garson:
I am in receipt of your letter of the 2nd instant enclosing proposed amendments to the British North America Act respecting old age pensions and a provincial sales tax. I have also received your further letter of the 20th instant.
With reference to the amendment to section 95, it is suggested that the words "or the legislature of any province" be added after the words "the parliament of Canada" where they occur in line 2 of subsection 2 of section 95 of the proposed amendment.
You will recall that the Prime Minister indicated that there would be concurrent legislation with respect to old age pensions and therefore the amendment should not be placed in section 91 of the British North America Act. In view of the wording of subsection 1 of section 95, and in order that there should be no question but that the legislatures of the provinces will have concurrent jurisdiction and will be enabled to enact legislation dealing with the age group of sixty-five to seventy and possibly to supplement the dominion old age pension at seventy, it seems to me that it is necessary to incorporate these words in the proposed amendment; otherwise the courts might construe the section as giving exclusive jurisdiction to the dominion, which I am sure you will agree was not intended.
The amendment to head 2 of section 92 as submitted appears to incorporate the agreement made at the Ottawa conference, and I have no objection to the addition of the words "and not so as to discriminate between sellers or classes of sellers of the same class of goods" as proposed in your letter of the 20th instant.
Yours very truly,
Ernest Manning Premier
Office of the Premier Province of Manitoba
Winnipeg, January 31, 1951
Hon. Stuart. S. Garson, K.C.,
Minister of Justice,
Ottawa, Ontario.
Dear Mr. Garson:
Your letter of January 3 enclosing drafts of two constitutional amendments to deal with old age pensions and retail sales tax, together with your letter of January 20 suggesting certain additional words to be inserted in the draft with regard to sales tax, have received careful attention in cabinet council. I am therefore writing to inform you of the conclusions which we have reached.
Your suggestion is that the question of old age pensions should be dealt with by adding a new subsection to section 95 of the B.N.A. Act. You will recall that during the discussion of this subject at the conference I made the proposal that old age pensions should be dealt with as a new subsection of section 91. We would like to repeat that suggestion now.
Under the proposal which is now before us, the federal government will be assuming complete responsibility for pensions to persons aged seventy and over and fifty per cent of the cost of pensions to persons aged sixty-five to sixty-nine inclusive. The result will be that the total cost to the federal treasury will be somewhat of the magnitude of $356 million while the total cost to all ten provinces will be approximately $32 million. In other words, the federal government has indicated its willingness to assume more than 90 per cent of the financial costs of old age pension schemes. Under these circumstances it seems to us fundamentally unsound that we should continue ten separate provincial administrative organizations in the field of old age pensions, each one of them overlapping with the federal jurisdiction and each one of them requiring constant exchange of information and constant co-ordination of information and administrative practices. On the grounds of eliminating unnecessary duplication of administrative machinery and of avoiding frequent misunderstandings between different governments, it is our view that one central uniform administrative machinery should be created to deal with the question of old age pensions. For this reason we would strongly urge that the proposed amendment with respect to old age pensions should simply be the addition of a new subsection in section 91 which would read "old age pensions."
If, however, this proposal does not find favour with your government and with the governments of the other provinces, we are prepared to support an amendment which will authorize the federal government to deal with old age pensions while continuing the authority of the provinces to do likewise. We feel, however, that there may be certain confusions created if the proposed amendment is made a subsection of section 95. At the present time section 95 follows a heading which reads "Agriculture and Immigration." It will obviously be somewhat misleading to carry under that heading a subsection dealing with old age pensions, and it may therefore be necessary to amend the heading also or to set up the proposed amendment as a separate section rather than as a subsection of section 95.
We understand that pensions for the blind are to be brought under the same arrangements as are proposed for persons seventy years of age and over. We therefore submit that the constitutional amendment in connection with old age pensions should have added to it the following: "and to pensions for the blind."
We have also given consideration to the proposed amendment to section 92, head 2, which would change that head so as to read as follows:
"2. The raising of revenue for provincial purposes by
(a) direct taxation within the province, and

(b) indirect taxation within the province in respect of the sale of goods (except goods sold for shipment outside the province) to a buyer for purposes of consumption or use and not for resale, at a rate not exceeding three per centum of the sale price, but not so as to discriminate between sales of goods grown, produced or manufactured within the province and sales of goods grown, produced or manufactured outside the province and not so as to discriminate between sellers or classes of sellers of the same class of goods."
This proposed amendment deals only with the sale of goods. It would therefore presumably not apply to such things as electrical power, or services provided by laundries, theatres, hotels, restaurants, barber shops and the like. It was our understanding that this amendment should enable the province to impose this type of tax wherever it is a more convenient method of raising revenue from the people in the province who get the benefit of goods and services available in the province. It therefore seems to us that the proposed amendment should make it clear that it covers these other types of industries which provide services directly to the consuming public.
Our advisers have suggested that since the proposed amendment, in prohibiting discrimination between sales of goods local to the province and those from outside the province, makes no specific mention of goods manufactured partially outside and partially inside the province, it might be possible to evade the prohibition by discriminating either against or in favour of goods partially manufactured within and partially without the province. Your government may desire to provide against any such possibility.
Yours very truly,
Douglas Campbell
The Premier
The Government of the Province of New Brunswick Fredericton, February 2, 1951
Hon. Stuart Garson, K.C.,
Minister of Justice,
Ottawa, Canada.
Dear Mr. Garson:
This has further reference to your letter of January 2, with which was submitted for consideration by the government of this province two proposed amendments to the British North America Act, one respecting old age pensions, the other a provincial sales tax.
We look upon these matters as quite distinct one from the other and capable of separate action.
As to the first relating to old age pensions, we understand this is being sought in order to make certain that the parliament and government of Canada have authority to implement the old age pensions plan enunciated on behalf of that government at the recent federal-provincial conference on fiscal and social security matters. If the federal government is satisfied that this proposed constitutional amendment is sufficient for such purposes, we are quite willing that the act be amended accordingly.
As to the second proposed amendment involving constitutional changes which would permit the provinces to impose indirect taxation by way of a sales tax, we feel that the proposal advanced will not meet the situation of the provinces, fixing as it does the maximum tax that could be levied thereunder at three per cent.
In our view the main and overriding purpose of such an amendment is to be found in the advantage which would accrue to the provinces through being
able to impose such indirect taxation in lieu of a purchasers' or consumers' tax such as is now found in five of the provinces. In at least two of these, including our own, the existing tax rate is in excess of three per cent. In the light of this situation we can see no advantage to be gained through a constitutional amendment which would limit or restrict a province in the manner suggested.
We would strongly urge that the federal government amend its proposals to permit the imposition of a tax at a higher level; to meet our situation it should be at least four per cent.
If this is done we shall be very glad to give further consideration to the form and content oi the proposed amendment.
Yours sincerely,
John B. McNair
Premier's Office Saskatchewan
Regina, February 5, 1951 Hon. Stuart Garson, K.C.,
Minister of Justice and Attorney General of Canada, Ottawa, Ontario.
Dear Mr. Garson:
The Saskatchewan government has studied the two proposed amendments to the British North America Act respecting old age pensions and a provincial sales tax contained in your letter of January 2, and also the addition of certain words to the provincial sales tax amendment contained in your letter of January 20.
We are satisfied that the wording which you have suggested for the two proposed constitutional amendments will carry out the spirit and intent of the decisions arrived at during the federal-provincial conference of last December.
The Saskatchewan government will submit the proposed constitutional amendments to the legislature as soon as possible with our complete endorsation and support. We feel, however, that on so vital a matter as endorsing important changes in the British North America Act the legislature should place the seal of its approval upon what is being proposed.
Yours sincerely,
T. C. Douglas
Office of the Premier Province Of British Columbia
Victoria, February 6, 1951
Hon. Stuart S. Garson, K.C.,
Minister of Justice,
Parliament Buildings,
Ottawa, Canada.
My dear Mr. Garson:
This is to acknowledge receipt of your letters of January 2 and January 20 with reference to the proposed amendments to the British North America Act.
Please be advised that while the government concurs in the draft legislation you have submitted, it has been deemed advisable to secure legislative approval of same. Consequently a formal resolution will be presented to the legislature within two or three days of the opening of parliament. It is
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my intention to bring on this motion as quickly as possible so that you may have the views of the legislature in respect thereto.
With kindest personal regards.
Yours faithfully,
Byron I. Johnson Premier
Premier's Office Saskatchewan
Regina, February 10, 1951
Hon. Stuart Garson, K.C.,
Minister of Justice and Attorney General,
Ottawa, Ontario.
Dear Mr. Garson:
Attached please find copy of our "Routine Proceedings" of February 8, in which you will note the resolutions which I placed on the order paper and which will probably be discussed and dealt with in the course of the next few days.
I thought you would be interested in having this, lest there should be any question raised as to the position which Saskatchewan takes with reference to the two constitutional amendments which your government has suggested.
Yours sincerely,
T. C. Douglas
Extract from Routine Proceedings and Orders of the Day of the legislative assembly, province of Saskatchewan, No. 6, Thursday, February 8, 1951. "Government Motions
1.	Hon. Mr. Douglas (Weybum), to move the following resolution:
That this assembly approves in principle the amendment of section 95 of the British North America Act, as proposed by the government of Canada, following the federal-provincial conference held in December 1950, under which, notwithstanding anything contained in the said act, the parliament of Canada may make laws in relation to old age pensions.
2.	Hon. Mr. Douglas (Weyburn), to move the following resolution:
That this assembly approves in principle the amendment of section 92 of the British North America Act as proposed by the government of Canada, following the federal-provincial conference of December 1950, under which, in addition to the power already possessed by the province, the province shall have power to raise revenue for provincial purposes by:
'Indirect taxation within the province in respect of the sale of goods (except goods sold for shipment outside the province) at a rate not exceeding three per centum of the sale price, but not so as to discriminate between sales of goods grown, produced or manufactured within the province and sales of goods grown, produced or manufactured outside the province, and not so as to discriminate between sellers or classes of sellers of the same class of goods.' ''

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Office of the Minister of Justice
Ottawa, Canada, February 28, 1951
Hon. Byron I. Johnson, M.B.E.,
Premier of British Columbia,
Parliament Buildings,
Victoria, B.C.
Dear Mr. Johnson:
On January 2, 1951, I wrote you forwarding two enclosed proposed amendments to the British North America Act respecting old age pensions and a provincial sales tax. On January 20 I wrote another letter setting out the text of a further amendment to the sales tax amendment which had been included in my letter of January 2.
In response to these letters I have now had replies from the provincial governments. In order that every provincial government will know what position every other provincial government has taken in relation to these amendments, I now enclose copies of all letters and enclosures which I have received from the provincial premiers and their colleagues in this connection which I list as follows:
Letters to me from
Premier Jones dated January 5, 1951;
Premier McNair dated January 6, 1951;
Premier Douglas dated January 8, 1951;
Premier Duplessis dated January 8, 1951;
Premier Macdonald dated January 19, 1951 and enclosures;
Premier Frost dated January 24, 1951;
Premier Jones dated January 25, 1951;
Premier McNair dated January 25, 1951;
Premier Manning dated January 26, 1951;
Premier Smallwood dated January 26, 1951;
Premier Campbell dated January 31, 1951;
Premier McNair dated February 2, 1951;
Premier Douglas dated February 5, 1951;
Premier Johnson dated February 6, 1951;
Premier Douglas dated February 10, 1951 and enclosure;
Telegram from Premier Jones to myself dated January 23, 1951;
Telegram from Premier Macdonald to myself dated January 31, 1951.
One reason for the language in which we drafted the amendment regarding old age pensions which we sent out in my letter of January 2, 1951, was to indicate that the federal government should also have powers to pass laws relating to old age pensions in addition to the powers which the provincial legislatures have already exercised in that behalf. We therefore drafted this amendment as follows: "Notwithstanding anything in this act the parliament of Canada may make laws in relation to old age pensions".
The premiers of Ontario, Nova Scotia, and Alberta raise the point that this language might perhaps be open to misinterpretation as giving the government of Canada sole jurisdiction in the field of old age pensions legislation. This was not what we intended, nor do we think that this is the effect of the language in question; but we are quite willing to try to draft a new wording which will reassure the premiers of Ontario, Nova Scotia and Alberta on the points they have raised. In an endeavour to do so I now submit a new draft of a new section 95A (not a new subsection to the section 95 itself) to read as follows:

"In each province the legislature may make laws m relation to old age pensions within the province; and it is hereby declared that the parliament of Canada may from time to time make laws in relation to old age pensions in Canada, but no law made by the parliament of Canada in relation to old age pensions shall affect the operation of any law in relation to old age pensions made by a provincial legislature."
A possible criticism of this new draft might be that by stating that in each province the legislatures may make laws in relation to old age pensions within the province, the draft implies incorrectly that the provincial legislatures do not nave this power at the present time. It may be argued that since there has been no suggestion in any of our negotiations that the provinces' power to pass such legislation should in any way be questioned, this provision is unnecessary since the provinces already have this power. However, even if unnecessary, it should not have any harmful implications, because it is along the same lines as section 95 with respect to agriculture in the provinces. No one could doubt that the provinces' powers to pass laws in relation to property and civil rights would have included (in the absence of section 95) the power to legislate with regard to agriculture. This provincial power was specifically mentioned in section 95 to make sure that it would not be excluded by giving jurisdiction to parliament in relation to agriculture in all or any of the provinces. Under section 95 the laws of parliament relating to agriculture were to have overriding effect. In the present old age pension amendment we wish it to be clear that the jurisdiction of the legislatures is not excluded by giving jurisdiction to parliament, and we wish it also to be clear that the laws of parliament will not affect the operation of the provincial laws. This new draft, therefore, is submitted to meet the objections raised by the governments of Ontario, Nova Scotia and Alberta.
If objection be taken to this second draft on the ground that it incorrectly implied that the provinces do not have the power to make laws in relation to old age pensions within the province, then perhaps a third draft might be considered, reading as follows:
"It is hereby declared that the parliament of Canada may from time to time make laws in relation to old age pensions in Canada, but no law made by the parliament of Canada in relation to old age pensions shall affect the operation of any law in relation to old age pensions within any province made by the provincial legislature of such province."
With regard to Premier McNair's suggestion that the provincial sales tax authorized should be raised from three per cent to four per cent, I regret to say that after consultation with my colleagues, our original view remains unchanged that the federal government cannot agree to an increase in this rate.
The suggestion made by Premier Campbell that the federal parliament should have exclusive jurisdiction over the whole field of old age pensions is concurred in neither by a number of other provincial governments nor by the federal government.
Premier Campbell's suggestion that the powers of indirect taxation should be applied to such things as electrical power, or services provided by laundries, theatres, hotels, restaurants, barber shops and the like has been carefully considered. It is our view that the provinces which are imposing power and amusement taxes of this sort at the present time under their existing powers of direct taxation are not experiencing sufficient difficulty to warrant this suggested change. Moreover, inasmuch as the sales tax amendment is meeting considerable opposition from taxpaying groups, we think that it would be unwise to complicate matters further by attempting to grant new taxing powers to the provinces which could be used to impose indirect provincial taxes over the whole field of service industries, and, as it would seem, of professional services.
Premier Campbell also makes the point that "[DOT] [DOT] [DOT] since the proposed amendment, in prohibiting discrimination between sales of goods local to the province and those from outside the province, makes no specific mention of goods manufactured partially outside and partially inside the province, it might be possible to evade the prohibition by discriminating either against or in favour of goods partially manufactured within and partially without the province. Your government may desire to provide against any such possibility."
In relation to this point, our feeling here is that while theoretically such a case might arise, we doubt if any provincial government would think it practicable to encourage provincial production by this type of discrimination.
While this is for the provinces to decide, our feeling is that for the purpose of this tax a commodity could perhaps be regarded by the provinces as manufactured in that province in which the last stage or stages in production took place. However, if there is a general feeling amongst the provinces that this point raised by Premier Campbell presents a problem which might cause serious embarrassment, we are quite prepared to consider putting into the amendment whatever may be agreed upon as an appropriate method of preventing this type of discrimination.
We would be glad to have your views in reply to this letter as promptly as possible. We shall give prompt attention to the replies which we receive from all of the provincial governments in reply to this letter; and if it appears that a further attempt to co-ordinate your views which we are now seeking should be made in another draft of this constitutional amendment, we shall produce another draft. If, however, it seems impossible to reconcile some of the views expressed by the provinces and our own views, I shall endeavour to achieve such reconciliation with the disagreeing provincial premiers by long-distance telephone; and if this proves impossible, it may be necessary for us to get together again as a group to consider these matters and to continue our efforts to reach a general agreement concerning them.
Yours very truly,
Stuart Garson
Enclosures.
994
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Premier's Office Prince Edward Island
Charlottetown, March 2, 1951
Hon. Stuart Carson., K.C.,
Minister of Justice,
Ottawa, Ontario.
Dear Mr. Garson:
Thank you for your letter of February 28, regarding proposed constitutional amendments.
The position of the government of Prince Edward Island regarding these amendments is that contained in my letters to you of January 5 and 25 last.
Should, however, it become expedient to adopt one of the substituted draft amendments set forth in your letter of February 28, respecting old age pensions, Prince Edward Island would prefer the text of the third draft.
Yours very truly,
J. Walter Jones Premier
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Wednesday, March 7, 1951	MISCELLANEOUS PRIVATE BILLS